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BadEconomics Discussion Thread, 23 September 2015 (self.badeconomics)

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[–]wumbotarianmodeled as if Noah Smith was a can opener 1ポイント2ポイント  (2子コメント)

GG Scott Sumner

So this was released.

Not sure what to think about it. I'd like to see how Breakeven Inflation fares (something I can do later in life in grad school!).

The only thing I can say is "1-year forecasts are more-or-less crap shoots".

Breakeven inflation picked up the actual deflation we had during the recession. SPF didn't.

FWIW, SPF didn't do jack all in my regressions for my senior thesis. BE Inf sorta did. One of the Fed branches has a cool data set that does even better. However they finagle expected inflation might be useful for predicting inflation.

[–]IntegraldsI am the rep agent AMA 0ポイント1ポイント  (1子コメント)

SPF moves more slowly than TIPS spreads.

For what it's worth, I'm getting great results with SPF data in my Phillips Curve regressions, as are Coibion (at UT-Austin) and Fuhrer (at the Boston Fed). So perhaps they're good on some dimensions but not others.

market-based inflation expectations are poor predictors of future inflation. This suggests that these measures contain little forward-looking information about future inflation.

Isn't there crippling endogeneity here? Whenever TIPS spreads fall, the Fed takes action to ensure that the low inflation implied by TIPS doesn't occur.

We find that market-based measures of inflation are poor predictors of future inflation. In particular, they perform much worse than forecasts constructed from survey expectations of future inflation, which incorporate all the information used by professional forecasters.

That's strong language given the weakness of their results. My eyeball evaluation of Figure 2 is that all forecasts have roughly similar forecast errors, not that inflation swaps are "much worse" than SPF.

[–]wumbotarianmodeled as if Noah Smith was a can opener 0ポイント1ポイント  (0子コメント)

Isn't there crippling endogeneity here? Whenever TIPS spreads fall, the Fed takes action to ensure that the low inflation implied by TIPS doesn't occur.

That's what I was thinking as well. Though doesn't that require the Fed to react to the TIPS spread? Not that they don't - there's been tons of usage of BE Inf lately by Fed people (like mr bernk and ms yelln)

My eyeball evaluation of Figure 2 is that all forecasts have roughly similar forecast errors

Yeah a half a percent or so ain't that much.

[–]fmn13Canadian Labor Reserves 1ポイント2ポイント  (2子コメント)

We all seem to agree NYT!Krugman is worse and way more cooky and prone to /be than 90's!Krugman but are there specific examples of him saying very controversial/wrong things?

[–]WeaselsWithEasels 0ポイント1ポイント  (0子コメント)

"Trump is Right on Economics."

If you actually read through the article with that title, of course, Krugman loads it up with a billion caveats about how he doesn't really mean Trump is right. (He doesn't, however, mention the specific ways that Trump is wrong.)

Dealing with this kind of prose is exhausting because it isn't written with clarity or good faith.

[–]btfx 0ポイント1ポイント  (0子コメント)

I recall someone making a post about his reversal on minimum wage. 90s Krugman Slate article was skeptical of Krueger, recent NYT Krugman NYT article had a different interpretation. Maybe someone can find it.
I suppose changing your mind over the course of a couple of decades isn't really grounds for criticism, but I do recall that the post had the strongest case for skepticism of Krugman I've seen.

[–]btfx 1ポイント2ポイント  (3子コメント)

IGM is not feeling the Bern when it comes to raising the minimum wage to $15 by 2020.
"the employment rate for low-wage US workers will be substantially lower" got a very mild agree
"increase aggregate output in the US economy" got a decisive disagree

There was a 2013 poll about a $9 minimum wage
The panel was split on "noticeably harder for low-skilled workers to find employment", however...
...there was a clear agree leaning on the policy being positive from benefits to workers.

Hamilton project says "Minimum wage policies are not an antipoverty panacea." but these credentialed panel members seem to be giving credence to the whole theme of a long flat top of the MPL(wages) graph where productivity gains make the efficient wage a fuzzy range instead of a hard figure. so /r/badeconomics, I have a question for you:
As god-emperor of AMERICA, what would minimum wage policy be after your EITC rulings take hold?
I'm just curious about the basic details of this plan that /r/badeconomics seems to have a consensus on.

[–]wumbotarianmodeled as if Noah Smith was a can opener 1ポイント2ポイント  (2子コメント)

Minimum wage no giod p

[–]btfx 0ポイント1ポイント  (1子コメント)

What's the deal with airline peanuts Syrian refugees?

If skilled immigration is pretty good and the refugees are not low-skilled on average, why isn't there a bidding war over them? Populist bias against anyhting that tek er jerbs? Seems to me like Russia and Japan both have a demographics problem that can be fixed by offering help. I'm assuming I'm badEconomics somewhere in my thinking and not literally the rest of the world.

[–]TNine227 0ポイント1ポイント  (0子コメント)

Are refugees not low-skilled on average? Also, even without considering the cultural change, the language barrier has gotta be a bitch. Also, yeah, populism, i don't know how true it is but neither Russia nor Japan have a reputation for being welcome to outsiders.

Not an economist.

[–]___OccamsChainsaw___Nietzsche Understands You 0ポイント1ポイント  (0子コメント)

Jumping off the recent LPC announcement, what's the economic opinion of public funding of the arts? I could probably guess at it but I've been surprised before.

Semi-related: what's everyone's favourite Shakespeare?

Semi-semi-related: anyone else played SOMA yet? The ~90 minutes I've had with it so far make it look really good. There's a moral choice that's actually compelling enough that I took the humane option. That's never happened before. I don't know what's going on.

[–]btfx 0ポイント1ポイント  (0子コメント)

  1. I'm under the impression that /r/badeconomics likes Brookings. Like, would you guys support a Brookings coup?
  2. Any reason not to like Brookings?
  3. Anything better? I recall someone singing praise of the Hamilton project, but I don't quite understand if they're a part of Brookings, or related, or what.

[–]atomic_rabbit 0ポイント1ポイント  (0子コメント)

I didn't see this discussed here yet, but Dani Rodrik just posted his latest missive challenging the kinds of pro-free-trade arguments appearing frequently on this subreddit, calling them "faith-based rather than science-based".

Many of the conditions under which free trade between nations is guaranteed to be desirable are unlikely to hold in practice. Market imperfections, returns to scale, macro imbalances, absence of first-best policy instruments are ubiquitous in the real world, particularly in the developing world on which I spend most of my time.

Rodrik's views are worth grappling with. He's a much more serious free trade skeptic than Ha-Joon Chang, too bad Ha-Joon Chang's so much more frequently cited in discussions.

[–]ethyn408 -1ポイント0ポイント  (2子コメント)

Wow, I've never seen one of these threads with less than ten comments.