Here is the memo that Larry Summers sent to President Obama when the 2009 stimulus package was being debated. It was originally confidential, but somehow it has recently been made public and is now going viral.
I make a brief cameo appearance on page 11: "Greg Mankiw is the only economist we have consulted with who refused to name a number and was generally skeptical about stimulus." I explained my skepticism here. Of course, the fact that I was "the only economist" expressing skepticism reflects the range of economists that Team Obama chose to consult.
Tuesday, 24 January 2012
Sunday, 22 January 2012
ruffle tunic
Don't you love learning something new? Last week I learned how to ruffle fabric using my Brother serger, and it sure beats pulling threads (thanks, Pinterest!). Check out the tutorial at {lbg studio} if you want to learn, too.
I made this little top for one of my favorite baby friends using the Sweet Little Dress pattern by Leila & Ben. I shortened the dress to a tunic, lengthened the sleeves to about 3/4 length, and added lots of playful ruffles. It felt really good to pull the serger out again - I even changed the thread!
Hope you had a great weekend. :)
Saturday, 21 January 2012
Penn World Table Bleg
I need some help from the growth empiricists out there. If you aren't one of them, stop reading. Continuing will be a waste of your time.
For researchers studying economic growth, one of the standard resources for cross-country data has been the Penn World Table. My 1992 paper with David Romer and David Weil (my most cited paper by a large margin) used this resource, as have numerous other papers in this literature. In my intermediate macro book, I present a couple of figures presenting some of these data.
Here's the problem: It seems that the data have changed substantially in the most recent revision, and I cannot figure out why.
My intermediate macro text shows a scatterplot of per capita income and the investment share of GDP. These two variables are strongly positively correlated. When revising this figure with the newest data, I found that the correlation declines substantially (though is still positive). When I looked into the source of the change, I found that the historical estimates of the investment share of GDP have changed, in some some cases by a lot.
Let me give you an example. Take the investment share for Ghana in the year 2000. According to version 6.2 of the data, the investment share was about 5 percent. In version 7.0, it was about 21 percent. This is one of the larger changes I have found, but it is not the only country for which there are sizable changes in the reported investment share of GDP.
I understand that the changes may be related to new information about the relative price of investment goods. But the changes seem too large to be explained so easily, although perhaps I am wrong about this. If anyone can shed light on the matter, I would be greatly appreciative. Send me an email if you can help.
-----
Update: I have not yet fully figured this out, but readers have sent me some useful links. If you are interested, click here, here, and here.
For researchers studying economic growth, one of the standard resources for cross-country data has been the Penn World Table. My 1992 paper with David Romer and David Weil (my most cited paper by a large margin) used this resource, as have numerous other papers in this literature. In my intermediate macro book, I present a couple of figures presenting some of these data.
Here's the problem: It seems that the data have changed substantially in the most recent revision, and I cannot figure out why.
My intermediate macro text shows a scatterplot of per capita income and the investment share of GDP. These two variables are strongly positively correlated. When revising this figure with the newest data, I found that the correlation declines substantially (though is still positive). When I looked into the source of the change, I found that the historical estimates of the investment share of GDP have changed, in some some cases by a lot.
Let me give you an example. Take the investment share for Ghana in the year 2000. According to version 6.2 of the data, the investment share was about 5 percent. In version 7.0, it was about 21 percent. This is one of the larger changes I have found, but it is not the only country for which there are sizable changes in the reported investment share of GDP.
I understand that the changes may be related to new information about the relative price of investment goods. But the changes seem too large to be explained so easily, although perhaps I am wrong about this. If anyone can shed light on the matter, I would be greatly appreciative. Send me an email if you can help.
-----
Update: I have not yet fully figured this out, but readers have sent me some useful links. If you are interested, click here, here, and here.
Friday, 20 January 2012
Thursday, 19 January 2012
On SOPA
Several readers have asked me my opinion of SOPA, the Stop Online Piracy Act. I fear that in this case, the devil is in the details, so I find it hard to reach a strong view. But I have been disturbed by the relatively knee-jerk reaction of the anti-SOPA crowd. This is a hard issue, and when someone makes it sound easy, I feel like they haven't thought it through very thoroughly.
The anti-SOPA crowd argues that this is a matter of basic liberty. But it's not. In a free society, you don't have the freedom to steal your neighbor's property. And that should include intellectual property. Moreover, it is the function of the state to enforce those rights. We don't leave it up to civil litigation to protect property rights (although that is part of the solution). We give the state substantial powers to stop theft. Just as owners of tangible personal property have good cause to call for a police force and a system of criminal courts, owners of intellectual property have good cause to ask the state to stop those who would infringe on their rights.
This is an important economic issue for the United States. We are large producers of intellectual property: movies, novels, software, video games, TV shows, and even economics textbooks. If offshore websites find a way to distribute this intellectual property without paying for it, it is as if organized crime were stealing merchandise from a manufacturing firm at the loading dock. It is neither efficient nor equitable.
Maybe SOPA goes too far. As I said, I am not knowledgeable enough about the details to judge. But we need something along these lines. Believers in free enterprise, property rights, and economic liberty should be among the most vocal advocates of laws to stop intellectual piracy.
The anti-SOPA crowd argues that this is a matter of basic liberty. But it's not. In a free society, you don't have the freedom to steal your neighbor's property. And that should include intellectual property. Moreover, it is the function of the state to enforce those rights. We don't leave it up to civil litigation to protect property rights (although that is part of the solution). We give the state substantial powers to stop theft. Just as owners of tangible personal property have good cause to call for a police force and a system of criminal courts, owners of intellectual property have good cause to ask the state to stop those who would infringe on their rights.
This is an important economic issue for the United States. We are large producers of intellectual property: movies, novels, software, video games, TV shows, and even economics textbooks. If offshore websites find a way to distribute this intellectual property without paying for it, it is as if organized crime were stealing merchandise from a manufacturing firm at the loading dock. It is neither efficient nor equitable.
Maybe SOPA goes too far. As I said, I am not knowledgeable enough about the details to judge. But we need something along these lines. Believers in free enterprise, property rights, and economic liberty should be among the most vocal advocates of laws to stop intellectual piracy.
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