The Ambrosini Critique

See data (the plural of anecdote) here.

Sometimes I wonder if statements like these — “many people pour years of their lives and love into projects which are absurd on the face of it and could be revealed as such within seconds” — describe most human behavior better than appeals to purposeful, optimizing “rationality.”

(… of the blog coverage variety …)

Will Wilkinson writes about Prof. Clark’s good book:

This a profoundly insightful work sure to raise ire and inspire further progress. Key claim: labor quality is the difference between rich and poor. Depressing claim: Sub-Saharan Africa has largely Malthusian conditions, so success in increasing health and life-spans has decreased the average material standard of living below hunter-gatherer levels. Biggest disappointment: seems evasive on the question of the cause of variations in labor quality. Why not culture?

I should be careful critiquing Prof. Clark’s work, he’s grading my Growth Field exam next week, but I have similar questions about his work.

The professor does a great job of carving out the negative space of whatever topic he’s writing about. In his papers, he tells his readers what can’t explain the phenomenon. He leaves us hanging, though, on what can explain it.

For example, take cotton mills in the 19th century. Many of the countries to develop early, did so via the textile industry. So the mills are important for understanding why some countries are rich today and some aren’t. Why was productivity in Indian cotton mills so much lower than in England in the 19th century (jstor link)? Clark demonstrates it wasn’t because of differences in schooling or the skill of managers or differences in technology or anything else you can think of. What caused the productivity differences then?

Dunno and Clark doesn’t provide the answer either. He does defend himself, though:

These lessons from the mills will undoubtedly seem to some as merely destructive of conventional wisdom on underdevelopment without suggesting any replacement. Nevertheless, identifying the effects of the local environment or culture on the labor force as the source of the poor performance of textile mills in low-wage countries is a significant advance in understanding development. For if we can isolate one factor as supremely important, no matter how poorly we comprehend that factor at present, we are in a much better position to direct future research on economic growth.

Oh man, there’s so many good books coming out (and I’ve pre-ordered them all):

• Prof. Clark’s on long run economic growth
• Tyler Cowan’s on everyday economics
• Dani Rodrik’s on globalization
• And Harry Potter!

Wish me luck on my Monetary Theory field exam this morning!

Apparently Mr. Sadr (of Sadr City fame) has issued a statement accusing Iran of supporting al-Qaeda in Iraq. From what I can tell, this is big news (from the link at the bottom of the page):

Then what made Moqtada go in the direction he did?

It was the result of factors that accumulated over time, and matured during his visit to Tehran. Sadr finally realized that his role was only second or third to that of the SIIC of Hakim, or the Dawa Part. A situation that a young revolutionary leader who won all his fame and clout in just a few short years couldn’t tolerate. In those years his name, and his army, rocketed upward in the media headlines and proved a powerful presence on the ground. Realizing that he’s being treated as a #2 made the ambitious, poorly educated youngster lose his balance. And he had little balance to give, compared to the older big-names who have extensive experience in the political world.

The publicity he got and the power he thinks he has put him in a position of accepting nothing less than being #1.

By distancing himself from Iran by accusing them of conspiring with al-Qaeda, Sadr has not only weakened them but he has weakened himself. This is a good thing if you think its those three factions that are preventing peace in Iraq. (I should add that I think the American presence is also a force against peace in the long run. The problem is in the short run Americans are providing stability. When does the short run become the long run?)

(The link from prominent blog type…)

Brad DeLong puts these words in Prof. Peri’s mouth:

If I had Giovanni Peri here at hand, I think that he would say that increased immigration is very good for new migrants, good for savers worldwide, good for native-born workers, good for previous immigrants who have substantially assimilated–social knowledge, English proficiency, et cetera–and probably bad for previous immigrants who have no assimilated. And he would also say that the model goes haywire and is untrustworthy when the number of non-assimilated immigrants is small, and that that going haywire is where the very large income losses for previous migrants is coming from.

And, of course, the thing to object to in the turn this entire debate has taken has been the failure to focus evenly on the consequences for all stakeholders in global migration–look at what happens to everyone, not just one particular group that is convenient for your current political position.

But I will ask him.

From what I can tell, Peri paper shows that because native born workers and immigrant workers are compliments (i.e. working together they produce more than the sum of their individual production), immigrants can help or at least not harm native workers. He hasn’t said anything about “savers worldwide” or “immigrants who have substantially assimilated.” His innovation was to think of workers as compliments not substitutes and he says nothing about the welfare effects of “all stakeholders in global migration.” I’m not sure were Brad is getting all this, but its not Peri’s paper.

Peri has shown complementarities existed. He didn’t identify the source of that complementarity. Maybe the industries immigrants moved into during the period of Peri’s study (1990-2004), like construction, were especially amenable to this happy division of labor. There was a housing boom, if I recall. Maybe the conditions that produced Peri’s counterintuitive result no longer hold. We keep hearing the housing bust is just around the corner.

Or maybe all the complementarities are “used up.” Industries have found all the ways, given the current stock of native born, to split jobs between natives and immigrants to exploit the division of labor.

I’m not trying to take away from the Professor’s paper and politically his results support my position on immigration. Its just not clear to me how Brad DeLong is reading so much into Peri’s paper.

DeLong’s post really makes me angry (its not the first time and by now I should be used to it, but still). Its fine for journalists or lay folk to misrepresent empirical results, everybody knows science reporting sucks. This is different. DeLong is an economist at a prestigious institution. Why is he treating Peri’s results like they’re simply arguments in a political discourse? Would he want me to claim his paper on despots and growth is an argument for the Iraq War? I doubt it.

Are we doing science here or are we just giving ammunition to political causes?

(h/t Sinners in the Hands of an Angry Blog)

The Hoopa Indians are profiled on Wikipedia today as the picture of the day (look at the bottom of the page before 5pm Pacific).

I grew up playing football against these guys. We usually beat them, but they were our hardest hitting opponents. I hated having to block one of their defensive linemen or linebackers… They were big and usually short so it was hard to get the necessary leverage to move them.

The one thing I always wondered about was the the fact that 50% or more of their players were blond haired and blue eyed. Were these guys Indians or were they mountain folks that came into the Hoopa Valley to go to school?

… not GDP growth. So says Robert Hall (via Business Week’s excellent Michael Mandel).

This seems like a no-brainer to me. Dynamic effects aren’t all represented by the growth numbers. Maximizing this years growth may actually mean reducing growth in the following years (see patent law).