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Posts Tagged ‘Justin Wolfers’

The Secret Consensus Among Economists

If you follow the economic policy debate in the popular press, you would be excused for missing one of our best-kept secrets: There’s remarkable agreement among economists on most policy questions.  Unfortunately, this consensus remains obscured by the two laws of punditry: First, for any issue, there’s always at least one idiot willing to claim the spotlight to argue for it; and second, that idiot may sound more respectable if he calls himself an economist. 

How then can the quiet consensus compete with these squawking heads?  A wonderful innovation run by Brian Barry and Anil Kashyap at the University of Chicago’s Booth School Initial on Global Markets provides one answer: Data.  Their “Economic Experts Panel” involves 40 of the leading economists across the US who have agreed to respond on the economic policy question du jour.  The panel involves a geographically and ideologically diverse array of leading economists working across different fields.  The main thing that unites them is that they are outstanding economists who care about public policy.  The most striking result is just how often even this very diverse group of economists agree, even when there’s stark disagreement in Washington. 

That observation is the starting point for my latest column with Betsey Stevenson: 


Odds of a Double Dip: A Sampling of Opinions. Plus, Wolfers on Twitter

So by now you’re hopefully aware that the stock market completely bombed today. As I type, the Dow is down more than 500 points, its worst day since December 2008. (Official day’s tally is -512.76) And just like that it seems, the recovery is over. Well it was fun while it lasted; kind of.
Our resident macro economic guru Justin Wolfers has come up for air from his Twitter experiment (follow him @justinwolfers) and sent over this interesting sample of recent opinions from a handful of economically savvy folks, all giving their odds of the economy entering another recession:
Larry Summers: “at least a 1-in-3 chance.”
Marty Feldstein: “now a 50 percent chance.”
Ryan Avent: “more likely than not.”
Justin Wolfers: “40% chance and peak was 4 months ago” and “The guacamole has spoken.”
Don Kohn, Vincent Reinhart, Brian Madigan: “between 20% and 40%.”
Matt Yglesias: “precisely 31.22%.”
Brad DeLong: “the odds now are 50-50.”
Christy Romer: “The risks have gone up…compared to where we were six months ago.”
Bob Hall: “We certainly are in a more vulnerable situation now.”
Jeff Frankel: “not necessarily enough to push the probability over one half.”
Jay Carney: “we do not believe that there is a threat there of a double-dip recession.”
Justin has had a busy today on Twitter. Clearly, he flipped heads this morning. Here’s a sampling of what he’s been tweeting about:


How Would You Simplify the Financial-Reform Bill? A Freakonomics Quorum

Last month, roughly two years into a global financial maelstrom, the U.S. Congress passed a financial-reform bill. It was more than 2,300 pages long, addressing everything from derivatives to consumer financial products to oversized banks. We asked a few clever people a simple question.


Massachusetts Senate Race Update

In the last couple of hours, the InTrade prediction markets have moved sharply in favor of the Republican candidate Scott Brown to defeat Martha Coakley in the Massachusetts Senate race.


New Editors at Brookings

O.K., I’ll admit that I’ve done plenty of hand-wringing about the state of economics. And now I’m going to do something about it. This morning, Brookings announced that David Romer and I will be taking over as the new editors of the Brookings Papers on Economic Activity. We’ve got some pretty big shoes to fill — left empty by Larry . . .


Co-author Confusion

When your co-author is your colleague and also your significant other, confusion often follows. Take this recent post by Arnold Kling on the causes of inequality, where he says: I think that Betsey Stevenson/Justin Wolfers marriages are another big factor. That is, when highly educated men start looking for wives who are stimulating companions as opposed to kitchen-floor moppers, this . . .


Tax Cuts vs. Government Spending

As the Senate and the House look to reconcile competing stimulus plans, the big debate is whether to emphasize government spending or tax cuts. A new paper by the New York Fed’s Gauti Eggertsson argues that the risk of deflation should tilt the balance to government spending. Our current problem is deficient aggregate demand. The government can raise total spending . . .


Is Ignorance Really Bliss?

A regular blog reader, Mitch Kosowski, sent along an interesting question: “Is ignorance truly bliss? Are people with lower intelligence happier than those with higher intelligence?” Let’s start with a quick literature review. Here are the findings reported by Simpson, L. (2001): Lisa Simpson: “As intelligence goes up, happiness goes down. See, I made a graph. I make lots of . . .


And Fry It Up in a Pan

It’s social change alright: 26 percent of working wives out-earned their working husbands in 2006, up by nearly half from 20 years ago.
Now that many more women are graduating college than men, higher-earning wives are going to become the new normal.


Free the Hangers

I typed this from 10,000 feet, while on my way to the annual econ gabfest known as the ASSA meetings. I was lucky enough to score an upgrade to first class, and as I settled into my seat I was informed about the most astonishing cost-cutting measure: U.S. Airways has taken the coat hangers out of its planes.


An Unhappy Year

In a New York Times Op-Ed on Saturday, Sonja Lyubomirsky wrote that subjective well-being has remained high during the recession. But she’s dead wrong. Here’s the gist of her piece, titled “Why We’re Still Happy” : Research in psychology and economics suggests that when only your salary is cut, or when only you make a foolish investment, or when only . . .


Puzzling Over the Invisible Economy

Last week I did something that felt very 1990’s: I purchased a compact disc. The CD wasn’t for me; it was a Christmas present.

As I wrapped the CD, I pondered the silliness of the whole enterprise. After all, the recipient — like most of us these days — listens almost exclusively to MP3 files. In fact, I’m not even sure if he has a CD player beyond his laptop, which he will use to convert his disc-shaped gift into a more useful set of MP3 files.


Crikey!

Color me confused, but I’ve never really understood the difference between a bet and “financial trade.” And if there ever really was a line, it’s definitely becoming blurrier. In recent months, there have been millions of dollars bet in options markets, as traders seek a big payday in the event that the economy heads south — and this hasn’t raised . . .


Is Happiness Contagious?

If those riding intellectual fads are sometimes guilty of sloppy reasoning, imagine what happens when two fads collide. That’s what happened when the British Medical Journal elected to publish a study analyzing 1) happiness in 2) social networks. The study, by James Fowler and Nicholas Christakis, concludes that happiness is contagious within social networks. According to the authors, your happiness . . .


Roland Fryer on The Colbert Report

I’m a bit late getting to this, but I just saw that my friend Roland Fryer appeared on The Colbert Report on Monday. He was — officially — talking about his current experiments with providing incentives for kids to get better grades. While it is pretty hard to look good next to Colbert, Roland pulled it off. And it takes . . .


The Recession Hits Home

Ronald Reagan famously described the distinction between a recession and a depression as follows: “A recession is when your neighbor loses his job. A depression is when you lose yours.” Right now, a few more economists might be willing to use the D-word. The “help wanted” publication for Ph.D. economists is sporting a brand new section: suspended or canceled listings. . . .


Assessing Your Divorce Risk

What are the odds of your marriage ending in divorce? This is a risk with some pretty important consequences, but chances are, you don’t have the foggiest idea on how to quantify it. Until now. My favorite economist (and my significant other), Betsey Stevenson, has put together a neat online widget for the folks at Divorce360.com. The widget crunches recent . . .


What Krugman Was Really Thinking

What was Paul Krugman thinking when he met President Bush last week? Here’s a list of over 300 photo captions from readers of this blog, and another couple hundred from Marginal Revolution here (with others here and Tyler Cowen‘s favorites here). Krugman, who graciously agreed to judge our Freako-versus-MR caption-that-photo contest, has spoken: Actually, I think it’s a tie — . . .


TiVo Economics

I love my TiVo. And like a good economist, I’ve been trying to quantify this love. Here’s what I came up with. I watch about six hours of television programming per week. The miracle of the “30-second skip” button means that I haven’t watched an advertisement in years. Consequently, six hours of programming only takes me four hours to watch, . . .


Bacon Ice Cream and Intertemporal Choice

Photo: lilivanili and shawnzam Yesterday I suggested that tastes may not be stable. And then last night, I had the chance to confront the data directly; my local restaurant was serving bacon ice cream. Bacon: Delicious! Ice cream: My favorite! The combination of bacon and ice cream: a direct threat to my views of economics. You see, every bite was . . .


A Beet Paradox

Photo: Darwin Bell Beets are the new broccoli. Or at least they will be after Obama takes office on January 20, as the president-elect recently revealed his distaste for this vitamin-laden root vegetable. And Obama is not alone: Even as beet salads have become popular in trendy eateries, most American kids I know also reject the mighty beet. It’s a . . .


Why Are Discount Stores Full of XS and XXL Clothes?

Photo: sporkist My former Ph.D. student and frequent co-author Erik Snowberg sends along an interesting question: Why do discount clothing stores (like Nordstrom Rack — and clothing sales in general) have an excess of really small and really large sizes? I have to admit, I’ve always wondered. Erik continues: The typical answer seems to be that there are more medium . . .


Bailout Plan, Redux

A revised bailout plan has been announced, and President Bush has thrown his weight behind it. To my eye, the rewriting of Paulson‘s plan this past week has been worthwhile; and the final plan, while imperfect, is a useful step forward, and a clear improvement on the original plan in terms of likely effectiveness, cost to the taxpayers, accountability, fairness, . . .


Usain Bolt: It’s Just Not Normal

Usain Bolt‘s wonderful run in the Olympic 200-meter sprint reminds us that the normal distribution — the familiar bell curve beloved by economists and statisticians — can be wildly inappropriate when analyzing extremely selected samples. This morning’s New York Times shows Usain Bolt’s new world record, relative to the 250 greatest 200-meter sprints ever. Not only does this not look . . .


Have Economic Debates Changed Since 1977?

I recently happened upon one of George Stigler‘s humorous asides in the 1977 Journal of Political Economy — “The Conference Handbook.” In order to make discussions of research papers more efficient, Stigler suggested that one should simply interrupt the speaker by shouting the numbered objection, rather than the usual, overly long interjection. And as a public service, he gave a . . .


Amazing New Trade Data

Wow. We really do live in the midst of a tidal wave of more detailed and interesting data. The latest: importgenius.com, the brainchild of brothers Ryan and David Petersen, with Michael Kanko. They exploit customs reporting obligations and Freedom of Information requests to organize and publish — in real-time — the contents of every shipping container entering the United States. . . .


Why Does So Much Hate Mail Come From Men?

I’m sure that most academics are used to the following: Occasionally I write a scientific paper, an OpEd, or a blog entry in which I wade into some controversy or another, and in the ensuing few days receive some fairly vitriolic messages in my personal inbox. I’m not objecting — after all, it seems that I’ve had my chance to . . .


Is Income Volatility Really Rising? For Whom?

Jacob Hacker‘s Great Risk Shift described rising income risk over recent decades as an important and quite general phenomenon. While there’s been plenty of controversy around that claim, the most careful analysis I have seen roughly supports Hacker’s contention. (The CBO, using different data and a different methodology disagrees.) What Hacker actually shows is that the average level of income . . .


What Exactly Concerns Us About Gas Prices?

There’s no doubt that Americans are currently frustrated by high gas prices. And certainly many voters believe that “something oughta be done about it.” But why? Here’s a simple taxonomy of concerns: 1. Relative prices: Are people frustrated that a gallon of gas now requires more foregone “stuff.” Or alternatively phrased, are they concerned about the low relative price of . . .