Gift Grub Constantin

Another example of the interest in Economics in Ireland is that many people involved in the Economics debate have become widely known. Constantin Gurdgiev as impersonated by Mario Rosenstock, embedded below, is brilliant viewing. If you are familiar with Vincent Brown, Mario Rosenstock or Constantin Gurdgiev, I think you will enjoy it.

Almlund, Duckworth, Heckman and Kautz IZA Paper: Personality Psychology and Economics

Personality Psychology and EconomicsAuthor info | Abstract | Publisher info | Download info | Related research | Statistics
Author Info
Almlund, Mathilde (almlund@uchicago.edu) (University of Chicago)
Duckworth, Angela Lee (duckwort@psych.upenn.edu) (University of Pennsylvania)
Heckman, James J. (jjh@uchicago.edu) (University of Chicago)
Kautz, Tim (tkautz@uchicago.edu) (University of Chicago)

Additional information is available for the following registered author(s):

Mathilde Almlund
James J. Heckman
Abstract

This paper explores the power of personality traits both as predictors and as causes of academic and economic success, health, and criminal activity. Measured personality is interpreted as a construct derived from an economic model of preferences, constraints, and information. Evidence is reviewed about the "situational specificity" of personality traits and preferences. An extreme version of the situationist view claims that there are no stable personality traits or preference parameters that persons carry across different situations. Those who hold this view claim that personality psychology has little relevance for economics. The biological and evolutionary origins of personality traits are explored. Personality measurement systems and relationships among the measures used by psychologists are examined. The predictive power of personality measures is compared with the predictive power of measures of cognition captured by IQ and achievement tests. For many outcomes, personality measures are just as predictive as cognitive measures, even after controlling for family background and cognition. Moreover, standard measures of cognition are heavily influenced by personality traits and incentives. Measured personality traits are positively correlated over the life cycle. However, they are not fixed and can be altered by experience and investment. Intervention studies, along with studies in biology and neuroscience, establish a causal basis for the observed effect of personality traits on economic and social outcomes. Personality traits are more malleable over the life cycle compared to cognition, which becomes highly rank stable around age 10. Interventions that change personality are promising avenues for addressing poverty and disadvantage.

The Science of Science Policy

I recently discovered the Science of Science Policy website, affiliated to the United States (U.S.) Office of Science and Technology Policy. The U.S. Congress established the Office of Science and Technology Policy in 1976 with a "broad mandate to advise the President... on the effects of science and technology on domestic and international affairs". The goal of the Science of Science Policy community is to "provide a scientifically rigorous and quantitative basis for science policy. The website provides a central location with news, information and research to help inform the Federal Government's science management decisions".

Closely related, the Science of Science and Innovation Policy (SciSIP) program was established at the U.S. National Science Foundation in 2005 in response to a call from John Marburger III for a "specialist scholarly community" to study the science of science policy. The program has three major goals: "advancing evidence-based science and innovation policy decision making; building a scientific community to study science and innovation policy; and leveraging the experience of other countries. A recent Science article highlights some of the issues addressed by SciSIP researchers."

Seventy-five SciSIP awards have been made to date. The awardees include economists, sociologists, political scientists, and psychologists as well as domain scientists. Some recent SciSIP awards (full abstracts available) which might be of interest to readers include Applied Visual Analytics for Economic Decision-Making and Universities, Innovation and Economic Growth. A report in the New York Times, from a couple of years ago, highlights a dataset that SciSIP funded jointly with the Kauffman Foundation, noting that it "tracks government-sponsored research for science and engineering and links it with government start-ups, patents, and other data. One goal of the research is to identify the characteristics of star innovators, scientists who are most effective in ushering research advances into the marketplace."

SafeSave

One of the authors of "Portfolios of the Poor", Stuart Rutherford, inter alia, was founder of SaveSafe, a banking provider for people with low-incomes in Dhaka.

On the "Performance" page of the Safesave website, it lists the following information. Its quite humbling in a sense to think what all this represents in terms of effort and desire for a steady life.

At end January 2011 SafeSave has nine branches serving 15,750 clients in the slums of Dhaka. Clients hold $709,000 in their savings accounts ($1 = 70 Taka). The average savings balance ($45) is growing quickly, partly due to the recent introduction of a long term savings plan in all branches. In March 2010, for the first time, the savings portfolio surpassed the loan portfolio in value.

8,600 of these clients hold loans worth a total of $614,000, or an average outstanding balance of $71 per borrower. The interest rate on loans is 3% charged monthly on the declining balance. There is no fixed loan repayment term, although interest must be payed on time each month in order for a client to increase his or her borrowing limit. In its more than 14 years of operation SafeSave has lent and recovered more than $5.5 million in this fashion, with a recovery rate exceeding 97%.

Each month 66 SafeSave collectors, all of them women from low income neighbourhoods, process more than 120,000 small transactions on handheld devices. SafeSave has been financially sustainable since 2005, when it stopped accepting donor grants, and began borrowing at commercial rates to finance growth. Those loans have now been fully repaid, and SafeSave is generating surplus capital which it invests in fixed deposits at scheduled banks. Reserves exceed 50%.

SafeSave’s annual return on assets is approximately 4.5%, and return on equity is approximately 16%.

Personality Traits and Economics

The Borghans et al (2008) Journal of Human Resources paper is cited over 200 times at this stage and is likely to be one of the most cited papers ever published in the journal (the famous Blinder decomposition paper has over 2000 citations but is nearly 40 years old). Almlund, Duckworth, Heckman and Kautz have written another extensive paper developing the literature on personalilty and economics linked here.

100 Years of the AER - The Top 20 Articles

Thanks to Dave Madden for forwarding on this link to an AER special paper reviewing its highlights.

The Grand Challenges of Personality and Individual Differences for Social, Behavioral and Economic Science

Written on behalf of the Association for Research in Personality. Document available here: NSF Grand Challenge.

Abstract. Individuals respond differently to social situations, economic circumstances, and physical environments, with important consequences for physical and mental health, occupational attainment, economic well‐being, community involvement, and mortality itself. The key questions in the psychological study of personality and individual differences are: What are the primary dimensions of personality and ability how can they best be measured? What are the origins of these individual differences? What are the psychological processes that underlie individual differences in personality? To what degree and in what ways is personality stable, variable, and changeable across the lifespan? What are the behavioral implications of personality and how do these implications vary with situational circumstances? What are the long‐term implications of personality for important life outcomes and how do these implications vary according to the nature of physical, social and cultural environment? Personality psychology is a “hub” discipline that stands at the crossroads of social psychology and economics, and also cognitive science, developmental psychology, health psychology, and biology. The key questions of personality psychology thus are both foundational and potentially transformative of broad areas of social science.

Economics for Business Studies: Does it Matter?

Does the Performance on Principles of Economics Courses Affect the Overall Academic Success of Undergraduate Business Majors?

Rupert G. Rhodd, Sandra M. Schrouder and Marcus T. Allen

Abstract: Using a sample of 1,339 graduates from an accredited business school and the maximum likelihood technique, this paper explores the relationship between overall academic success and performance on the Principles of Economics courses. The estimated model, which also includes some demographic variables, shows that the rank of professors teaching the course, age of students, and the number of credits earned do not influence business majors’ overall academic success. However, the grades earned on the Principles of Economics courses, gender, ethnicity, the major in which the student is enrolled, the number of years the student takes to graduate, as well as whether or not the student is completing a minor significantly affect the overall academic success or the final GPA of business majors.

Economists' ethics

"The executive committee of the American Economic Association voted unanimously on Thursday to create a committee to consider the association's existing disclosure and other ethical standards and potential extensions to those standards" according to an article in the Chronicle of Higher Education. This issue arose after Gerald Epstein criticized a number of US economists for possible conflicts of interest (arising from memberships of boards or positions as consultants) in their policy pronoucements along with a failure to disclose such possible conflicts.
It would be interesting to know the extent to which this is an issue for Irish economists.

Grand Challenges in Economics

(ht Stephen Kinsella) - the NSF issued a call this year for white papers on the grand challenges in the social and behavioural sciences. The AEA have posted the Economics submissions on this page. Would be very interested in discussing some of these submissions with readers of the blog interested, particularly the behavioural and measurement papers.

Acemoglu, Daron Challenges for social sciences: institutions and economic development

Alesina, Alberto Why certain countries have developed and others have not?
Altonji, Joseph Multiple Skills, Multiple Types of Education, and the Labor Market: A Research Agenda

Autor, David and Lawrence Katz Grand challenges in the study of employment and technological change

Baily, Martin Neil Some Foundational and Transformative Grand Challenges in Economics

Berry, Steven A Proposal for Future SBE/NSF Funded Research: Refocusing Microeconomic Policy Research

Bloom, Nick Key Outstanding Questions in Social Sciences

Blume, Lawrence Robustness and Fragility of Markets: Research at the Interface of Economics and Computer Science

Boskin, Michael Ideas about possible NSF grand challenges in economics over the next twenty years

Brown, Charles, Dan Brown, Dalton Conley, Vicki Freedman, Kate McGonagle, Fabian Pfeffer, Narayan Sastry, Robert Schoeni, and Frank Stafford Future Research in the Social, Behavioral, and Economic Sciences with the Panel Study of Income Dynamics

Card, David, Raj Chetty, Martin Feldstein, and Emmanuel Saez Expanding Access to Administrative Data for Research in the United States

Cramton, Peter Market Design: Harnessing Market Methods to Improve Resource Allocation

Cutler, David Why Don’t People and Institutions Do What They Know They Should?

Diamond, Peter Three Important Themes: Taxation of Capital Income, Behavioral Economics in Equilbrium Analyses, and Systemic Risk

Duflo, Esther A Research Agenda for Development Economics

Eaton, Jonathan and Samuel Kortum The Contribution of Data to Advances in Research in International Trade: An Agenda for the Next Decade

Fischer, Stanley Questions about the Future of the International Economy

Fudenberg, Drew Predictive Game Theory

Gintis, Herbert Long-range Research Priorities in Economics, Finance, and the Behavioral Sciences

Goulder, Lawrence Integrating Economic and Political Considerations in the Analysis of Global Environmental Policies

Greenstein, Shane, Josh Lerner, and Scott Stern The Economics of Digitization: An Agenda for NSF

Gruber, Jon What is the Right Amount of Choice?

Haltiwanger, John Making Drill Down Analysis of the Economy a Reality

Hansen, Lars Peter, Markus Brunnermeier, Anil Kashyap, Arvind
Krishnamurthy, Andrew W. Lo Modeling and Measuring Systemic Risk

Hanson, Gordon Future Directions for Research on Immigration

Hanushek, Eric Developing a Skills-based Agenda for "New Human Capital" Research

Hart, Oliver Making the Case for Contract Theory

Heckman, James A Research Agenda For Understanding the Dynamics of Skill Formation

Hubbard, Glenn Some Compelling Broad-Gauged Research Agendas in Economics

Imbens, Guido Challenges in Econometrics

Jackson, Matthew Research Opportunities in Social and Economic Networks

Jorgenson, Dale A New Architecture for the U.S. National Accounts

Kapteyn, Arie Measurement and Experimentation in the Social Sciences

Kroszner, Randall Implications of the Financial Crisis

Levine, David Virtual Model Validation for Economics

Lo, Andrew A Complete Theory of Human Behavior

Moffitt, Robert A New Household Panel in the U.S.

Nordhaus, William Some Foundational and Transformative Grand Challenges for the Social and Behavioral Sciences: The Problem of Global Public Goods

Poterba, James Research Opportunities in Economics: Suggestions for the Coming Decade

Reis, Ricardo Three outstanding challenges for economic research

Rodrik, Dani A Research Agenda in Economic Diagnostics

Rogoff, Kenneth Three Challenges Facing Modern Macroeconomics

Roth, Al Market Design: Understanding markets well enough to fix them when they’re broken

Samuelson, Larry Future Research in the Social, Behavioral and Economic Sciences

Stavins, Robert Some Research Priorities in Environmental Economics

Van Reenen, John The productivity grand challenge: Why do organizations differ so much?

Varian, Hal Clinical Trials in Economics

Weir, David Grand Challenges for the Scientific Study of Aging

The subversion of economics?

If you like criticizing economists' role (in general) in the recent economic turbulence and Larry Summers (in particular) this is worth a read.

Economics Students 2010

For the undergrads and masters students reading the blog it is worth sitting back for a second and thinking that, although job prospects seem terrible, we are living in historic times. Economics is a great discipline to study during major market crashes. Many of the Nobel winners of the late 20th century formed their ideas from basic human curiosity about the causes and effects of the Great Depression. So many aspects of daily life are salient reminders of market forces in operation and cues for change. You may or may not like him but people like Michael O'Leary sat doodling in the back of TCD Economics classes the last time this country was a hopeless case. Countless others saw how markets would change and what they would need to do to make an impact. Hopefully, a lot of big ideas are going to come from the group of students taking Economics classes here over the course of this recession. It is an open question as to whether the teaching of Economics itself may have contributed to the current mess. If so, then it is not the fault of the ideas themselves but rather how they have been filtered and applied. There is a fairly mad drinking party going on just outside my window here and I'm pretty sure it is not the wine reception from the Heidegger conference. It is tempting to hear the chants of "uggy oi..uggy oi.." and "ole ole ole" and assume that this crew simply wont have the interest or the application to create massive change and that we are in terminal decline. But it is worth listening closely to what the brighter and more motivated of the current group of students are thinking about how this economy should be organised. Taking students seriously to me means trying to intellectually engage with those of them with good ideas rather than just nodding sympathetically when they whinge about courseloads. College should be a practice swing at thinking big ideas, a chance to do them as a set of rehearsals before the real thing starts. My motivation going in front of undergrad classes this year will be to help to put some wind in the sails of bright and motivated people with good ideas.

William Easterly introduces Principles of Economics

A nice rant from William Easterly on introducing students to Economics. Below is slightly out of context but gives a good feel.

The boredom of economics education also has the unfortunate effect of making economics scarce in aid work, given the number of aid ideas that violate elementary principles that all economists (from all points on the political spectrum) agree upon.

Sorry, I’m not all that concerned with “how individuals, blah, blah, optimal choices, blah, blah, scarcity, blah, blah…”  I’m concerned why some people are so rich and other people are so poor. I want to understand why some economies work and others don’t, and why even the ones that work still don’t work for everyone. I want to understand how other Americans and I got 64 times richer than our ancestors.

I want to know why Robert Iger, the CEO of Disney, makes $140,000 a day, and why some rock-breakers I met in Ghana make $1 a day. I think a differential of 140,000 times is pretty important to understand (obviously includes both domestic and international inequality).

 (Addendum note Easterly also uses the blah, blah construction so clearly not just restricted to Kevin!).

NSF:SBE 2020 - Future Research in the Social, Behavioral & Economic Sciences

NSF: SBE (National Science Foundation: Social, Behavioural and Economic Sciences) invites individuals and groups to contribute white papers outlining grand challenge questions that are both foundational and transformative. More details are available here.

NSF: SBE expect these white papers to advance SBE’s mission to study human characteristics and human behaviors in its Social and Economic Sciences and Behavioral and Cognitive Sciences divisions, as well as to be the nation’s resource for understanding the structure and development of science through its Science Resources Statistics division.

White papers should address the following questions:

1. What is the fundamental question/questions? And why is this important? Explain the challenge question, capability to be created, or scientific strategy; provide context in terms of recent research results and standing questions in the field; and suggest the range of disciplines that may contribute.
2. What are the implications for advancing the domain? For building capacity? And for providing infrastructure? By “advancing the domain,” we mean the fundamental science; by “capacity” we mean education and training of graduate students, faculty, and systems of prestige, promotion, and recognition; and by “infrastructure”, we mean the shared data and systems that enable the research (e.g., large survey data sets, research centers, shared toolkits and so on).
3. Who is doing provocative research?
4. What other questions should SBE ask as responses are analyzed?

Respondents must answer (1) and (2); they are encouraged to answer (3) and (4). A white paper should have no more than 2,000 words, and should be submitted by September 30, 2010.

The economics tribe

This mock ethnography of Economists by Leijonhufvud is funny if a little dated.

http://unicast.org/enclosures/life-econ-crop.pdf

Why economists and women are not nice

Everybody thinks economists are wicked people who would cheerfully send children up chimneys, cut the minimum wage and [horror of horrors] make well-off people pay for their own investments in higher education. Now we have the evidence to prove it.

Why are economics students more selfish than the rest?

1. Elaina Rose (with Yoram Bauman)

A substantial body of research suggests that economists are less generous than other professionals and that economics students are less generous than other students. We address this question using administrative data on donations to social programs by students at the University of Washington. Our data set allows us to track student donations and economics training over time in order to distinguish selection effects from indoctrination effects. We find that economics majors are less likely to donate than other students and that there is an indoctrination effect for non-majors but not for majors. Women majors and non-majors are less likely to contribute than comparable men.
http://d.repec.org/n?u=RePEc:udb:wpaper:uwec-2009-20&r=cbe

Economist: The Best Books of the Year

The Economists list is linked here 

Below is my next read, following the reviews. 3 others in the Economics and Business category also look good.

How Markets Fail: The Logic of Economic Calamities. By John Cassidy. Farrar, Straus and Giroux; 416 pages; $28. Allen Lane; £25
A sharp look at the roots of the financial crisis that turns into an excellent history of economic thought, by a British writer at the New Yorker.

Attitudes of Economics Graduate Students

Economic Logic Blog  (a consistently good source) points to a new paper by David Colander and colleagues on how students from median graduate schools think compared to those from the top ones.

How Do Median Graduate Economic Programs Differ from Top-ranked Programs? Author info | Abstract | Publisher info | Download info | Related research | Statistics
Author Info
David Colander (colander@middlebury.edu)
Tiziana Dominguez
Gail Hoyt
KimMarie McGoldrick

Abstract

This paper reports the results of a survey of median economics graduate programs and compares it with the results of a survey of top economics graduate programs done by Colander. Overall it finds that while there are some differences in the programs, there are large areas of similarity. Some of the particular finding are that there are more US respondents in median programs than in top programs, median students have more interest in econometrics, history of thought and economic literature than do students at top programs, although after the fifth year, their interest in any field drops significantly. It also finds that students at top schools are much more likely to be involved in writing scholarly papers, and that students at top schools give far less emphasis to excellence in mathematics as a path to the fast track than do students at median schools.

Economic Advice and Political Decisions

thanks to "mostly economics blog" for pointing out this excellent article by Alan Blinder on the "clash of civilisations" between economists and policy makers. Married folks will particularly enjoy the metaphor of policy advice as being like a good marriage. We are in the process in Ireland and elsewhere of thinking through the role economics and economists should play in policy.

link here

CEPR Paper on What Economics Should Learn

A good paper from Luigi Spaventa asking what economics needs to learn from the fact that "embarrassingly few" economists were warning of growing systemic financial risks prior to the beginning of the unraveling of the financial system.