I received a rejection letter recently that puzzles me. My co- authors and I don’t really see how the criticisms below apply to our paper, apart from the single spacing and not citing any articles from that journal. We would welcome any comments. Don’t worry about being overly frank. We are especially interested in whether Empirical Finance has some customary style we are not following. Here is the paper’s abstract:
Peggy Noonan’s “Now He Tells Us: If only they’d listened to Greenspan! And they might have, if only he’d spoken clearly” is good on how the former Fed chairman has saved his criticism of pork barrel spending for his book rather than making it when it might have actually stopped the spending:
Has anyone pointed out that large landfills full of plastic bottles and disposable diapers are a solution to global warming?
.
The Northern Rock bank run is interesting (background below from a newspape account). I’ll make three points: 1. Stupidly low deposit insurance limits caused a rational run, 2. The government should have made Northern Rock pay for the free full deposit guarantee it just got, and 3. It’s time to get out of savings accounts and bank stock shares if you’re British..
Someone asked me about the past few years’ papers on exclusive dealing, so I did some thinking. I’ll lay it out in my own way.
Suppose we have 100 buyers, each with 1% of the market, one upstream incumbent seller who charges the monopoly price. Everybody knows that in a year a potential entrant seller will arise, and that he will need 15% of the market to achieve the necessary scale economies.
The London School of Economics has a great idea: a computerized seminar sign-up list. You choose the seminars that interest you, and get email notifications.
Visiting Taipei, I saw this brand of coffee for sale in cans, and it is also a chain of coffeeshops. G. said the chain is in India too. Note the design, and how easy it would be for someone who does not read the Roman alphabet to distinguish B AR I STA and STA R B UCKS.
width= "240" >
Some 40 years ago, not long after I attended the Cambridge Grammar School for Boys for a year, many counties in England ended the distinction between academic and vocational government secondary schools. The result was that more of the academic students went to private schools instead, schools which are frighteningly expensive (on the order of 15,000 pounds per year for a boarding school, and day primary schools that I looked at in Oxford were about that, too).
In effect, the government decided to get out of the business of providing academic secondary education, a libertarian step. That’s ironic, though, because it would have made more sense to keep the academic schools and privatize the vocational ones. Smart kids are more likely to have parents who can judge when the government school is doing a bad job and complain, or who will remedy its deficiences. Ordinary kids are more likely to have parents who can tell whether school A is better than school B from their advertizing, but can’t tell whether a monopoly is doing well or poorly.
I was just giving advice to my student Changmin Lee about going on the American academic job market. Some of the advice I’ll want to repeat, so I’ll put it here. If every foreign student takes this advice, it will help the market work a lot better. And it is a good illustration of how to apply game theory thinking to real-world situations.
1. On your curriculum vitae (resume), put somewhere “A recording of me speaking English is available at http:/www.iu.edu/jkjkjk.mp3, and a movie of me teaching is available at http:/www.iu.edu/jkjkjk.mov.”
You might want to omit the movie, but for a foreign student the recording is crucial. Think of it this way. For Korean students, the employer’s prior is that the job applicant can’t speak English well enough to be worth looking at seriously. You need to provide information to possibly change that belief.
The Fed allows banks to borrow “at the discount window” as a lender of last resort. Traditionally, the interest rate has been below the market rate, which seems wrong to me. The Fed only provides this service because there are banks which are truly solvent but can’t get short-term credit anywhere else. By definition, almost, these are banks which are willing to borrow at above the market rate. Thus, it would help to sort out who really needs the funds to charge above the market rate instead of below. Apparently the Fed only figured this out in 2003, a commentor at Marginal Revolution tells us: (more…)
At lunch today we were talking about inheritance taxes. Why are they considered unfair?
I think it is because it is a tax on virtuous behavior. Saving is virtuous compared to spending now. Giving away money is virtuous compared to spending it on oneself. Bequests are both saving and gifts. Hence, to impose a massive tax (say, 40%) on a bequest while imposing small taxes (say, 4%) on selfish consumption is unfair.
From a value-maximizing point of view, the giving away of money has the benefit that it makes two people happy — the giver, and the donor. Also, if taxing investment income is value-demaximizing, inheritance taxes are bad because they are a tax on saving. They tax the principle of saving, not just the return.
Windows is awesomely bad. How can as big a company as Microsoft do things so poorly? I do not mean that rhetorically. Rather, why don’t they spend a little more money and make a far better product, for which they could charge more? I suppose Bill Gates must be blamed– he controls the company, and he must not have a good feel for technology and so doesn’t understand why good design matters. There is not market corrective for the problem of a monopolistic leader who fails to see something imoprtant. This matters for policy purposes, because such incompetence only survives because of a government-granted monopoly— copyright and patent on software.
Here’s an example, which I’ll list so I can use it as a standard reference. What matters is not that this is so important to operation, as that it shows such incompetence in design.
I want to cancel all my print jobs, because one job is jamming the printer for some reason. Windows has a window that shows print jobs and supposedly allows the user to cancel any one of them, but as often as not, that command is ignored by the computer. Probably that’s incompetent design too, but let’s give Microsoft the benefit of the doubt– maybe there is some technical reason why some print jobs can’t be cancelled without restarting the machine. So I went to the Web.
Remember how so many people were saying that Bush was such a protectionist? (based on the admittedly bad steel policy but nothing else, as far as I could see) The Democrats are now showing that they are the protectionist party, and, at the same time, that they don’t really care about international public opinion, just about European and Arab public opinion. The
Wall Street Journal writes:
Democrats are promising to improve America’s image in the world if they retake the White House next year. Tell that to Peru and Colombia, which are watching Democrats in Congress renege on free-trade assurances that are barely a month old.
Colin Bird asked what I thought about Hayek’s view of economic methodology, in particular, about his criticism of it in his 1937 Economica article. I might not be understanding it fully, but my impression is that what he doesn’t like about the economic theory of his day is that it:
1. Ignores the fact that people are imperfectly informed and differently informed about prices, products, and methods;
2. Ignores the interesting question of how people become informed;
3. Makes policy conclusions on the basis of theories deficient in their treatment of information (i.e., from points 1 and 2).
This is clearest in his 1945 AER article, the most famous one, which is mostly about the role of prices rather than methodology:
May 1, 2008: This post is obsolete and wrong in places. For something better, go to:
http://rasmusen.org/t/2008/04/illegal-immigrants-cause-21-of-crime.html
How much does crime by illegal immigrants cost America each year? My estimate is $84 billion per year.
Typesetting has been moving to the developing world in the past ten years. That seems natural: it requires a lot of moderately skilled labor and little capital or propinquity, since files can be sent over the Internet. But maybe the trend will reverse. I’m seeing from personal experience that the Third World lacks one crucial input: dependability. (more…)
Benjamin Barton, in Do Judges Systematically Favor the Interests of the Legal Profession?, says (I see fromDo Judges Systematically Favor the Interests of the Legal Profession?, says”> Emprical Legal Studies)
Many legal outcomes can be explained, and future cases predicted, by asking a very simple question: is there a plausible result in this case that will significantly affect the interests of the legal profession (positively or negatively)? If so, the case will be decided in the way that offers the best result for the legal profession.
Fischel, I think, had a good article on the Professional Ethics part of this.
This topic came up at lunch.
- In 2001, the average charge for a surgical abortion at 10 weeks’ gestation was $468; but since most abortions in the United States are performed at low-cost clinics, women on average paid $372 for the procedure. (31)
How much does a medical abortion cost? In 2001, the average charge for a medical abortion was $487. (31)
Who pays for abortions?
- Some 74% of women pay for abortions with their own money; 13% of abortions are covered by Medicaid, and 13% are billed directly to private insurance. Some women who pay for the procedure themselves may receive insurance reimbursement later. (31)
Does the U.S. government help poor women who need abortions pay for them?
- Congress has barred the use of federal Medicaid funds to pay for abortions, except when the woman’s life would be endangered by a full-term pregnancy, or in cases of rape or incest. As of November 2006, 17 states used their own funds to subsidize abortion for poor women. (38)
Which is the best way to write this proposition?
(1) “If x =2z, then y = 3z; and if x =2v, then y = 3g.”
(2) “If x =2z then y = 3z, and if x =2v then y = 3g.”
(3) “If x =2z, then y = 3z and if x =2v, then y = 3g.”
(4) “If x =2z, then y = 3z, and if x =2v, then y = 3g.”
From a Fumare commentor:
I had read Arroyo’s book (an outstanding biography of Mother Angelica!) but had forgotten about Harry John.
Mother Angelica’s caution about giving control of her endeavor to Harry John also extended to great concern about giving control to the Catholic Church or the bishops. In the book, there is a thrilling story about the American bishops trying to take over EWTN after Mother had made it successful (which Mother would not stand for, because she knew EWTN’s orthodoxy would be threatened with the bishops in control). If I remember the story correctly, the bishops attempted to gain control of EWTN through Mother: as a religious community in a diocese, Mother and her order were subject to the bishop, and thus, EWTN may have been subject to the bishop. Mother anticipated the bishops’ checkmate and preemptively called an unscheduled emergency EWTN board meeting where she (and her loyal laypeople) passed a new set of bylaws giving all control of the board to lay people and not to any religious or diocesan members, and then Mother immediately resigned from the board, cutting off the conduit between EWTN and the religious community through which the bishops were trying to gain control. A great story of political and church intrigue.
Bad Behavior has blocked 555 access attempts in the last 7 days.