Eric Rasmusen’s Weblog

From Proust, Times Rediscovered:

I
knew how often I had been unable to give my attention to things or to
people, whom afterwards, once their image had been presented to me in
solitude by an artist, I would have gone leagues and risked death to
rediscover.

Quite true. So often I see a tree, or some clouds, which I know are better than anything I’ll see in a painting, yet I do not, or maybe even cannot pause to appreciate the beauty.

At the AEA meetings, I heard Kenneth Elzinga contrast two views of freedom. One view, the usual political one, is of freedom from external coercion. The Christian view is of freedom from sin, which I interpret as freedom from internal coercion. Both of these, I think, are reasonable meanings for freedom, merely reflecting different obstacles to our wills. Someone who wishes to give up being a mobster might be prevented by fear of being punished by another mobster, or he might be prevented by his own greed. The greed is his own, but he might equally say to himself in both situations that *he* wants to give up his sinful life but cannot. The question with internal coercion is what “he” means. Which desire is the true man, the greed (which is the stronger) or the expressed will? In such a situation he might be thankful for being coerced externally into entering the government’s Witness Protection Program, giving up crime under the threat of imprisonment.

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I heard an apt proverb today at the law lunch.

“Pigs get fat. Hogs get slaughtered.”

I went to a good American Economic Association session in Chicago last Saturday on heterogeneity in firms. The panel was made up of economists who taught strategy (Garicano, Sutton, Gibbons, Rivkin, Gertner), and the topic was how organization and performance interacted to make some firms operate better than others– Toyota vs. GM and the celebrated NUMMI project in which Toyota took over a GM plant being central examples.

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From Eugene Volokh:

If you own land in Arkansas, Minnesota, or Wisconsin, rest secure in the
knowledge that the land is expressly “declared to be allodial” by the state
constitution. Ark. Const. art. 2, § 28; Wisc. Const. art. 1, § 14; Minn. Const.
art. 1, § 15 (”are allodial” rather than “are declared to be allodial”). It may
be igneous, or sedimentary, or metamorphic. It may be alluvial or illuvial
(though likely not effluvial). But in any case, it’s allodial.

“Allodial” is in contrast to “feudal”, and means without duties to a lord.

Someone once asked me to post on the afterlife, writing,

In relation to your post on Assurance of Salvation, perhaps you can set out on your website a justification for believing in an afterlife at all. Like you, I, too, am a Christian, but when I consider such facts as the Earth is one little planet in a universe of hundreds of billions of planets, and the fact that apes share 99% of their DNA with us, etc., I can’t help but wonder sometimes if there is an afterlife at all. So, unfortunately, I’m a bit of a doubting Thomas and need additional assurances there is an afterlife. I look forward to any comments you may post.

The “billions of planets” problem is easily resolved. Mark Twain puts it well in his story, Captain Stormfield’s Visit to Heaven. Captain Stormfield died and has been shooting through space for a long time, but he finally arrives. (more…)

Suppose lagged Y is in a time series cross section regression like this:

y_{it} = \alpha_i + \gamma y_{i,t-1} + e_{it}

Is OLS consistent?

Yes, I think, but this is
a nice setting for thinking about what “consistency” means. If we replicated the same 10 years and 50 industries 1,000 times, with new disturbances each time, the Within Groups estimator would get better and better, I think. What is more natural is to think of going to 1,000 years and 1,000 industries, and that gets better too.

But going to 10 years and 1,000 industries does not make the bias get any smaller. This, I think, is what Nickell (1981, Econometrica) says.

And in a small sample, estimators are often biased, which we forget. When we only have 10 observations for something– the years here– the bias can be pretty serious.

Though, actually, maybe there’s not a bias, just inconsistency. This seems to be a Gauss-Markov Theorem BLUE situation. Maybe ex ante there is no way to know which direction the mistaken estimation will go, positive or negative.

If you acknowlege Jesus Christ as Lord, shouldn’t you be willing to vote for him as Lord of your country?
An item from
Volokh:

Forty-six Polish Members of Parliament proposed a resolution “stating that Jesus
Christ is the King of Poland” (Poland Business Newswire, Dec. 21). The Catholic
Church and the majority of Poles (51%-33%, see PAP News Wire, Dec. 21) opposed
the move; the speaker of the Parliament took the view that the Parliament “needs
the opinion of the Episcopate before [the declaration] could be voted on,” so I
take it that the move is dead.

My categories are a mess in this weblog, and I’ve given up using most of them. The way Wordpress sets them up, the writer can only select the top ten or so without going down a slider, and I have set up too many categories. I should just condense them. I can delete categories, but then the posts go into “Uncategorized”. What I’d really like is a flexible tree system as in computer directories. Anybody know a Wordpress or generic way to do that?

I may just delete most of them anyway. The search engine is about as good a way to find posts in a given category, and I could add keyword tags if I wanted to. I wonder if the Wordpress search engine searches for “commented” keywords?

I’ve discovered a pleasant game. I sit at the computer, and type in a story as my 4, 6 or 7-year-old child tells it. They may or may not start with a collection of things that will be in the story (a princess, a beggar, a castle), and they make it up as they go along. Then we go back over it and I suggest taking out the numerous instances of “And…”, “So…”, and “Then…”. At the end, we have something that pleases the child and is good for sending to grandma.

Should a person read books or see movies that contain impurity? I recently watched Das Boot, a German movie about a submarine. It was in German, but there was plenty of nautically vulgar language, and a certain amount of gore. Viewing it desensitized me to some extent, though of course I am already mostly desensitized, and movies like that only act as “booster shots”. Thus, there is some rationality in the typical choice to keep such things away from children but not from adults. Adults are already desensitized, so the marginal harm is less, and the benefit of the movie is the same.

I’ll ramble around on this topic for a while. (more…)