Monthly Archives: November 2008

Here is an example of the ‘identification problem’ in empirical work

Talking Points Memo | Not About Lehmann?

God knows what the correct ‘instruments’ are here.  But finding them seems pretty important now.

The most frustrating part of teaching a class

is dealing with the ‘grade negotiators.’  Why oh why do they believe that I don’t think about the grades before hand.

The coffee session at the big conferences

reminds me a lot of my early days of going to big parties in high school. Lots of people walking around trying to look like they are going somewhere. They don’t check out your clothes like in high school, but instead check out your name tag…

Oh youtube

I went to a workshop today in which the speaker wanted to show us some simulations from his model.  He had posted the simulations on youtube, and so he went to youtube.

What was most interesting was the other videos that youtube decided were similar.  Stochastic simulations and Sarah Palin.  Who knew.
Neat.

Reviewing the second round.

I try to referee papers on the first round so that with high probability  the paper that comes back on the second round is a paper that I can recommend publishing.  If that works, the second round report is easy–short, with some minor changes.  But not always.

My experience as an author and as a referee is that when the first round is wishy-washy, the second round is unsuccessful.

Interestingly, the fiscal stimulators have shifted from discussing Japan to discussing the Great Depression

But look at this:
Financial crisis management: Lessons from Japan’s lost decade | vox – Research-based policy analysis and commentary from leading economists

Fiscal stimulus packages may not work

One big lesson from Japan’s 1990s is that Keynesian policy per se did not work for the financial crisis due to the collapse of asset prices. While Japan undertook huge fiscal stimulus packages repeatedly in the 1990s, the government did not pursue a serious policy effort to make banks dispose of their nonperforming loans. As a result, a huge amount of hidden nonperforming loans swelled under implicit collusion between the government and banks. Naturally, the payment uncertainty and economic shrinkage persisted for years. The essential problem was the spreading of payment uncertainty, and policies centred on public works and tax cuts were not direct enough to attack the problem, though they were temporarily effective at mitigating the severity of the economic downturn. Direct debt relief for mortgage borrowers and distressed (but viable) firms, along with fiscal assistance for the liquidation of nonviable firms, are straightforward, cost-effective fiscal policies much more capable of wiping out the payment uncertainty than standard public works and tax cuts.

Could is be that they want fiscal stimulus for other reasons? The political economy is interesting, to say the least.

The academic job market

is going to be strange this year.  I suspect many universities will make offers as fast as they can, so that they don’t lose the positions in the upcoming crunch.  Many will be unsuccessful so we are going to have very full classrooms next year, as demand will have increased (unless the student loan market really craters).

Good times ahead.