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Economics

A collection of 57 issues

Political Macroeconomics

Look, Ma, I Connected Some Dots! In late 2019, in a lecture at the Watson Center at Brown University, Raghuram Rajan spoke about the challenges facing the Indian economy. While discussing the trends in growth in the Indian economy (I have linked to the relevant section in the video, see

Too Much Churn: Estimating Customer Churn

A new paper uses financial transaction data to estimate customer churn in consumer-facing companies. The paper defines churn as follows: There are three concerns with the definition: 1. The definition doesn’t make clear what the normalizing constant is for calculating the share. Given that the value “can vary between

Not So Robust: The Limitations of "Doubly Robust" ATE Estimators

Doubly Robust (DR) estimators of ATE are all the rage. One popular DR estimator is Robins’ Augmented IPW (AIPW). The reason why Robins’ AIPW estimator is called doubly robust is that if either your IPW model or your y ~ x model is correctly specified, you get ATE. Great! Calling something

Instrumental Music: When It Rains, It Pours

In a new paper, Jon Mellon reviews 185 papers that use weather as an instrument and finds that researchers have linked 137 variables to weather. You can read it as each paper needing to contend with 136 violations of the exclusion restriction, but the situation is likely less dire. For

Rent-seeking: Why It Is Better to Rent than to Buy Books

It has taken me a long time to realize that renting books is the way to go for most books. The frequency with which I go back to a book is so low that I don’t really see any returns on permanent possession that accrue from the ability to

STEMing the Rot: Does Relative Deprivation Explain Low STEM Graduation Rates at Top Schools?

The following few paragraphs are from Sociation Today: Using the work of Elliot (et al. 1996), Gladwell compares the proportion of each class that gets a STEM degree compared to the math SAT at Hartwick College and Harvard University. Here is what he presents for Hartwick: Students at Hartwick College

Amartya Sen on Keynes, Robinson, Smith, and the Bengal Famine

Sen in conversation with Angus Deaton and Tim Besley — pdf and video. Excepts: On Joan Robinson “She took a position—which has actually become very popular in India now, not coming from the left these days, but from the right—that what you have to concentrate on is simply maximizing

Trading On Overconfidence

In Thinking Fast and Slow, Kahneman recounts a time when Thaler, Amos, and he met a senior investment manager in 1984. Kahneman asked, “When you sell a stock, who buys it?” “[The investor] answered with a wave in the vague direction of the window, indicating that he expected the buyer

The Puzzle of Price Dispersion on Amazon

Price dispersion is an excellent indicator of transactional frictions. It isn't that absent price dispersion; we can confidently say that frictions are negligible. Frictions can be substantial even when price dispersion is zero. For instance, if the search costs are high enough that it makes it irrational to