BRIEFLY NOTED: For 2023-05-17 We

Does polishing regulation to raise your World Bank "doing business" score really bring on a recession?; the English vice; UNIX considered easy & intuitive; Yglesias on NIMBYism as the root of most...

MUST-READ: Short-Run Economic Growth &* “Doing Business” Scores:

I have two, but only two, significant complaints about this paper—only two things keeping me from buying it completely:

The first is that VAR shocks are black magic. Yes: you can fit the low-order autocorrelations of nearly any time series with a concise AR approximation. That does not necessarily mean that you should. That does not necessarily mean that the time series is actually generated by something close to the concise AR approximation. And that does not mean that the calculated innovations have any meaning:

Tamanna Adhikari & Karl Whelan: Did raising doing business scores boost GDP?: ‘We use the time series variation in the World Bank’s “distance to frontier” estimates of the ease of doing business to assess the effects of changes in this variable on real GDP per capita. The use of Vector Autoregression techniques allows us to identify shocks to the Doing Business scores that are initially uncorrelated with GDP, thus addressing an important endogeneity problem that affects the cross-sectional literature on this topic. We report a robust finding that improvements in Doing Business scores have at least a temporary negative impact on GDP and find little evidence for a positive effect in the years following these improvements…

The second is that there is no mechanism: The “doing business” score increases in year zero by one standard deviation, and real GDP the next year drops by 0.35. But the effect of “ease of doing business” is supposed to be long-term and cumulative.

My guess is that, if the innovations mean anything, they mean that the government sees a likely recession coming, and somebody inside the Treasury is able to use the resulting “we must do something!” response inside the government to push through administrative reforms. The fact that the impulse-response to a “doing business” score innovation sees a year-one fall in all of consumption, investment, and government spending makes me think this explanation more likely—that what we are seeing is an economic decline leading governments that anticipate it to scramble for things that will reassure and demonstrate at least some competence.

But I think that taking a look at what actually happened in some of the influential observations in this study is low-hanging fruit for any student who wants a good project this summer…

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ONE IMAGE: I Continue to Find Þis Unbelievable:

And the fact that anyone at all votes for Tories in England equally unbelievable:

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ONE VIDEO: AT&T (1982): UNIX: Making Computers Easier To Use:

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Very Briefly Noted:

1. Bay Area Times: ‘Twitter openly “moderates” content in Turkey, as election heads to a runoff…

2. Wikipedia: Edo Five Routes…

3. Matt Ford: Neil Gorsuch’s Ruling Against the Pork Industry Contained a Telling Confession: ‘Gorsuch… “With that history in mind, it is hard not to wonder whether [they] have ventured here only because winning a majority of a handful of judges may seem easier than marshaling a majority of elected representatives across the street.”

4. Rowan Cheung: How to enable ChatGPT Plugins…. Launch ChatGPT, click on your username in the bottom left corner, select 'Settings,' then 'Beta features.' From this menu, activate the features you wish to use…

5. Rafael Torres Gaviria: Horsemen of the Apocalypse: The Mongol Empire and the Great Divergence: ‘The Mongol Invasions of the 13th century… violence, commerce, and technology in the structural transformations of Eurasia… the large-scale violence and new trade opportunities brought by the Mongol Empire allowed Western Europe to catch up and surpass the levels of income and technical capacity of the great Asian civilizations. Furthermore, I found that the impact of the Mongol Conquests persisted and deepened at least into the 19th century...

6. Gideon Rachman: Xi Jinping’s Taiwan ambitions threaten China’s rise: ‘A war to take the island would wreck the progress Beijing has made over the past 40 years…. “Hide your brightness, bide your time.” That famous piece of advice from Deng Xiaoping…. But Xi Jinping, who has led China since 2012, has decided that the “bide your time” era is over...

7. Alice Evans: Is there a Crisis of Masculinity?: ‘Donald Trump's and Andrew Tate's sexism may go viral, but such views are vanishing…. Culture mediates structural transformation and demographic transition. Modernisation in patrilineal Asia has spawned skewed sex ratios, frustrated incels and a real crisis of masculinity. The West also faces problems of hate, but since this is amplified by corporate algorithms, it is far more amenable to transformation…

8. Duncan Black: Collaborators: ‘I don't know if the "liberal" Justices are personally corrupt, but if they are running interference for their corrupt colleagues then what difference does it make? There aren't many people entrusted with the kinds of power that people at the top have. It is right to expect more from them…

9. Ellie Carina: The Trials of Mairon…

10. Nathan Baschez: Robo-Coaches Are Here: ‘AI-generated advice…. The fundamental experience is totally different: it’s personalized…. allows you to ask follow-up questions and make adjustments… gives people a feeling of connection and accountability…

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¶s:

1. Matthew Yglesias: I'm skeptical that powerful AI will solve major human problems: ‘Los Angeles has spawned the most vicious NIMBYism… [because] the traffic jam situation is really dire. The most prominent criticism… [of] One Billion Americans… was Bill Maher saying my ideas would make traffic jams worse…. Why can’t patriotic centrists get behind an agenda of expanded national immigration and economic growth? Traffic jams…. The smart play would be to concentrate the upzoning around the area’s existing and planned Metro stations and in and near its many existing islands of locally walkable neighborhoods. The tax revenue spawned by more housebuilding would lay the groundwork for a more rapid buildout of Metro, and it’s entirely plausible that a YIMBYfied version of Los Angeles would have many fewer vehicle miles traveled per capita than the current version of the city. But… it’s hard to avoid the conclusion that Maher is right: many more people would mean more cars on the road and worse traffic jams. The good news is that a well-understood solution exists in the form of congestion pricing: charging people for using the roads at crowded times reduces crowding…

2. Itamar Drechsler & al.: Banking on Deposits: Maturity Transformation without Interest Rate Risk: ‘We show that maturity transformation does not expose banks to interest rate risk—it hedges it. The reason is the deposit franchise, which allows banks to pay deposit rates that are low and insensitive to market interest rates. Hedging the deposit franchise requires banks to earn income that is also insensitive, that is, to lend long term at fixed rates. As predicted by this theory, we show that banks closely match the interest rate sensitivities of their interest income and expense, and that this insulates their equity from interest rate shocks. Our results explain why banks supply long-term credit…

3. Michael Tomasky: Walls Closing in: ‘Why Clarence Thomas’s Troubles Have Just Begun: Two of the more aggressive Senate Democrats are asking Thomas and Harlan Crow questions. And they have a lot of ways to get answers…. Clarence Thomas and his defenders say he’s done nothing wrong. Well, if he’s done nothing wrong, why not detail the extent of the gifts? I think it’s pretty obvious why. They must come to gargantuan sums….. Ginni rake[s] in some dubious cash from organizations trying to influence her husband’s votes, and Clarence needs to live off the “personal hospitality” of people like Crow. It’s my understanding that there’s more news coming…. And Wyden and Whitehouse are going to keep at this…

4. Tim Burke: Academia: Harm, Unquestioned: ‘[A] student complaining that they felt insulted by a faculty member who had previously embraced their ambitions to break into film and TV production saying “Well, get used to waiting tables”. That student desperately needed someone to tell them, “This is the conventional wisdom about what a person trying to make a go of it in theater, TV or film ends up doing while waiting for the big opportunity, there’s no discriminatory malice here.”... I don’t know that many devout Muslims between 18-22 know that Muslim artists who were regarded as devout made images of Muhammed… but if they’re in college they should be prepared to come to know that…. Two classes of precarious professionals—student affairs professionals and contingent faculty…. I honestly think that thirty years ago they would have stood together, aligned behind the same instructional project. I don’t fault people in precarious positions trying to get the other person in trouble first, but I do fault the institutions for letting that go on at all…