Wednesday, 16 April 2014

A few good links: Economics and academia

Next month we are hosting the annual campus open day and I am thinking that the School of Economics should lead with the slogan: Come for the signalling, stay for the human capital! As it turns out, it is probably a combination of the two that matters. The blog Cognito Mentoring has an interesting post on why Economics majors in the US earn more than majors in the other social sciences. It could be:

  • That we teach them more employable skills,
  • That they have greater pre-existing ability,
  • That economics students seek higher paying jobs,
  • That they have a pre-existing desire to make money,
  • Or some signalling combination of all of the above.
The blog promises some evidence soon.

I also found a excellent post at The Blue Review on how academics spend their time. It is a long post, explaining the study, the sample, the method and results, but worth the read. We sometimes think that US academics are all important, high-impact researcher types, so it is heartening to read that the the average Joe also spend lots of time on the mundane tasks of academia. Scary amounts of time go towards meetings and emails. It also says that Departmental chairs work slightly fewer hours per week, so I am clearly doing something wrong!

But, if you are not caught in that rat race you may be an academic celebrity. The Chronicle had a good post this week on TED speakers, celebrity authors and bloggers. I wonder who their South African counterparts may be…

Finally, Felix Salmon had an interesting bit in Politico magazine and asked if there is a wonk bubble. It is all about the data journalism, storytelling and policy etc that you see in new sites like and and other familiar sites / mega blogs. He argues that the wonk bubble is still relatively small and the more wonkery there is, the more valuable it becomes. I am following both of the above via Flipboard and both have interesting content. 538 has more US content, sport etc that I am less interested in (but there was an interesting post on 'peak beard' today), but Vox has had some good pieces and posts with a nice flip card, web native format. Check it out and support the wonks.

Sunday, 13 April 2014

A few thoughts and links on inequality and on growth

As ever, there were a few interesting posts to read over the past week and I want to mention two:

Krugman's review of Piketty's Capital in the 21st Century is online at the New York Review of Books. He calls it awesome and writes amongst other things: "It therefore came as a revelation when Piketty and his colleagues showed that incomes of the now famous “one percent,” and of even narrower groups, are actually the big story in rising inequality. And this discovery came with a second revelation: talk of a second Gilded Age, which might have seemed like hyperbole, was nothing of the kind." Tables of this kind tell the story:
He gives an overview of the data collected, the theoretical view that such inequality is caused by the the rate of return to capital being higher than the rate of economic growth, the importance of inherited wealth and the call for wealth and inheritance taxation. When he does criticize, it is about the neglect of super-salaries in the US - where you can still do as well by becoming a hedge fund manager as you can by marrying wealth!

The book is being read and commented on by everyone - you can just try "Piketty " and "Capital" in Google. The Economist has a book club for Capital. The New Yorker summarised it in six charts. Marginal Revolution posted some good comments by Matt Rognlie following Krugman.

Get your Kindle copy here.

In a different vein Dani Rodrik had an interesting post at Project Syndicate blog on the way that developing economies are growing. He writes:

Even in countries that are doing well, industrialization is running out of steam much faster than it did in previous episodes of catch-up growth – a phenomenon that I have called premature deindustrialization. Though young people are still flocking to the cities from the countryside, they end up not in factories but mostly in informal, low-productivity services. Indeed, structural change has become increasingly perverse: from manufacturing to services (prematurely), tradable to non-tradable activities, organized sectors to informality, modern to traditional firms, and medium-size and large firms to small firms. Quantitative studies show that such patterns of structural change are exerting a substantial drag on economic growth in Latin America, Africa, and in many Asian countries.
This has a SA counterpart in Andrew Kerr and co-authors' article in the latest issue of the SAJE. On the topic of job creation and destruction they write:
We also find that larger firms are better net creators of jobs than small firms and that net job creation rates are negative in manufacturing. Our research has important policy implications – particularly for the South African National Planning Commission's 2030 plan, in which new jobs are envisaged to come mainly from small- and medium-sized firms. Our research suggests that this scenario is not likely without changes to policy or legislation.
Food for thought all round.

Monday, 7 April 2014

Links from the interwebs

Once I get interested in something, I see it everywhere. The posts and articles that I tag "future of jobs" have been everywhere recently:

  • The economist had two interesting pieces: We, robot and How productive are robots? The first argues that distributed knowledge, or the so-called extended mind of the cloud is going to fuel further automation. The second compares the productivity of robots across countries. Ryan Avent concludes with the paragraph:
There is another possibility, however, which is simply that robots are straightforward substitutes for labour, not complements. Robots are labour-augmenting in the sense that fewer workers are required to produce a given level of output, but not in the direct sense that might allow for roboticisation to generate higher wages. Robots generate more income for the owners of the firm's capital, and unless there is an institutional structure in place to compel the owners to share those gains (as in some European economies) the income benefits of higher productivity escape workers entirely. Maybe.

  • In a related vein J Bradford DeLong writes in a Project Syndicate piece that Marx was wrong about capital and labour being substitutes, but that may not be the case today: Marx and the mechanical Turk
If you are interested in inequality (who is not these days?), have a look at the Chartbook of Inequality.

Finally, if you wonder whether a developmental state can something about unemployment, poverty and inequality in South Africa, read Philippe Burger's new ECON3x3 post, drawing on his Presidential Address at last year's ESSA meeting.