The authors conclude that the top PhD programs are serving their students ill, and I won’t necessarily argue with that. Academia is changing, and the path to tenure at a decent university seems more fraught with hard work and long odds than ever. But their analysis needs a heavy dose of realism–in particular, specification of what economists would call an objective function. If your goal is to be a tenured professor at a decent college or university, what would it take to succeed? And how likely is success if you can get yourself through a top 10 or 20 program? I don’t think Conley and Önder have really answered these questions.
via Bill Sundstrom’s Blog: Surprisingly high non-success?.
OK as I am reading the paper, here is an important sentence (“Goes to intent, your honor”):
The result has been a movement toward Iceland’s becoming an international banking center (although on a small scale because the country is, after all, a microstate), where its banks perform financial intermediation, mostly outside of the country… the
Icelandic banking system has changed from a system of local depositary institutions to an international financial intermediator in only five years.
Switzerland, Hong Kong, London, New York. Mishkin and Herbertsson should have been asking themselves: does a huge new money center pop up in 5 years because it has comparative advantage, or because there is lax financial regulation and consequently much leverage? if you wanted to argue the former, some evidence of rapid successful expansion of money market without an underlying fundamental change in financial flows (i.e. no resource rents) would be in order. they provide none.
I think the craze is over even as news reports blow it way up, because if I am buying it because it is on sale for 99c at Grocery Outlet (pallets full of the stuff) and I am not liking it (well I might buy it again at 50c) then it isn’t going to be so big. What I don’t understand is that the original Brazilian version supposedly is sweet/salty (like a margarita?) so why do the versions on sale here taste so bad?
Next up baobab craze?
“Inside Job” filmmaker Charles Ferguson replied to Mishkin:
First, Prof Mishkin alleges that I focused exclusively on his report on Iceland. But in an interview in September 2009 lasting more than an hour, and for which I can supply both video and transcript, I asked Prof Mishkin about his general views of the financial crisis and its causes, his 2006 report Financial Stability In Iceland, his activities as a governor of the Federal Reserve Board, his post-crisis views on issues ranging from financial reform to the growing inequality of income and wealth in the US and his consulting activities since returning to Columbia University.Prof Mishkin suggests that his 2006 report on Iceland identified various systemic risks, that the majority of bad behaviour in Iceland’s financial system occurred afterwards, and that Iceland’s real risks were unknowable. At the time he wrote his report, Iceland’s banking system had already borrowed $50bn, more than four times Iceland’s gross domestic product, in the preceding five years Iceland’s Financial Supervisory Authority had a total of 40 employees, including clerical staff, to monitor all of the country’s financial companies and markets, including banking, investing, and insurance and during the bubble about a third of these regulators departed to work for the banks. Prof Mishkin’s report does not mention this.Moreover, Prof Mishkin writes in his article: “The filmmaker made insinuations that I didn’t disclose that I was compensated for the study – even though he learned the precise amount of the fee in 2006 from a public disclosure that I made.”However, Prof Mishkin did not disclose in the report that he was paid to write it. Indeed, one of the most disturbing things I learned in making Inside Job, an issue discussed in the film, is that US universities do not require disclosure of financial conflicts of interest by faculty members, place no limits on the sources and size of professors’ outside income, and do not collect information on the size of this income. The only reason we now know of Prof Mishkin’s payment for the Iceland report is that he was later forced to disclose it when he was appointed to the US Federal Reserve Board.
via The director of ‘Inside Job’ replies | Economists’ Forum.
Preludes to the Icelandic Financial Crisis
Iceland became one of the symbols of the fourth wave of the financial crisis, since the end of the first decade of the twenty-first century. Between 2003 and 2008, the market value of the stock of Iceland’s biggest companies increased by 700 per cent, and the assets of its three banks multiplied eightfold to eight times the country’s GDP. When the bubble burst, it helped bring the world economy to its knees.This volume brings together several papers written by professional economists before the crash, warning of the dangers of the bubble economy that was being created. The papers discuss the imbalances created by an inflow of foreign capital, the hazards of a rapidly expanding banking system, and the perils that all banks face in a bubble economy. The chapters also provide a case study of the economics profession before the collapse of the international financial system. What did and didn’t they see coming, and why? An introduction and conclusion contextualize the articles and draw out some important lessons.This book is essential reading for all interested in macroeconomics, economic policy and international finance, as well as anyone seeking to grasp the causes of the deepest global recession since the Great Depression.
via Preludes to the Icelandic Financial Crisis – Robert Z. Aliber – Palgrave Macmillan.
The United States economy rebounded heartily in the spring after a dismal winter, the Commerce Department reported on Wednesday, growing at an annual rate of 4 percent from April through June and surpassing economists’ expecations.In its initial estimate for the second quarter, the government cited a major advance in inventories for private businesses, higher government spending at the state and local level and personal consumption spending as chief contributors to growth. Economists, who had been hoping for a full reversal of the first quarter’s decline, were cheered by the second quarter’s numbers. The consensus forecast for G.D.P. was 3 percent.
via U.S. Economy Grew at 4% Rate in Second Quarter, Beating Expectations – NYTimes.com.
When a researcher estimates the parameters of a regression function using information on all 50 states in the United States, or information on all visits to a website, what is the interpretation of the standard errors? Researchers typically report standard errors that are designed to capture sampling variation, based on viewing the data as a random sample drawn from a large population of interest, even in applications where it is difficult to articulate what that population of interest is and how it differs from the sample. In this paper we explore alternative interpretations for the uncertainty associated with regression estimates. As a leading example we focus on the case where some parameters of the regression function are intended to capture causal effects. We derive standard errors for causal effects using a generalization of randomization inference. Intuitively, these standard errors capture the fact that even if we observe outcomes for all units in the population of interest, there are for each unit missing potential outcomes for the treatment levels the unit was not exposed to. We show that our randomization-based standard errors in general are smaller than the conventional robust standard errors, and provide conditions under which they agree with them. More generally, correct statistical inference requires precise characterizations of the population of interest, the parameters that we aim to estimate within such population, and the sampling process. Estimation of causal parameters is one example where appropriate inferential methods may differ from conventional practice, but there are others.
via Finite Population Causal Standard Errors.
HT: Bill Sundstrom