Catching-up....

Sorry for the lack of new posts. I've been very busy and last week I was in Ethiopia...

- The map of US slavery. (HT, Urban Demographics);
- Google ngram: a inflation X unemployment;
- Time was in love with the president of Brazil in 1954. (HT,"O" Anônimo);
- Inflation targeting and the crisis.

2009 was great...

...compared to 410 AD.
(HT schumpetetetris)

The Economist's New Clothes

This BBC 4 radio show about the 2009 crisis has interviews with Quah, Scholes e Thaler. (The presenter is quite simplistic, but it is a nice show anyway)

"Economic History Matters!"

Samuelson says! (HT Brad Delong!)

The best abstract ever

The prize goes to:

"What - or Who - Started the Great Depression?
Lee E. Ohanian

NBER Working Paper No. 15258
Issued in August 2009
NBER Program(s): EFG

---- Abstract -----

Herbert Hoover. I develop a theory of labor market failure for the Great Depression based on Hoover's industrial labor program that provided industry with protection from unions in return for keeping nominal wages fixed. I find that the theory accounts for much of the depth of the Depression and for the asymmetry of the depression across sectors. The theory also can reconcile why deflation and low levels of nominal spending apparently had such large real effects during the 1930s, but not during other periods of significant deflation. "

Jorge Luís Borges reads "Del rigor en la ciencia" (On Exactitude in Science) (Via Boing Boing)

In that Empire, the Art of Cartography attained such Perfection that the map of a single Province occupied the entirety of a City, and the map of the Empire, the entirety of a Province. In time, those Unconscionable Maps no longer satisfied, and the Cartographers Guilds struck a Map of the Empire whose size was that of the Empire, and which coincided point for point with it. The following Generations, who were not so fond of the Study of Cartography as their Forebears had been, saw that that vast Map was Useless, and not without some Pitilessness was it, that they delivered it up to the Inclemencies of Sun and Winters. In the Deserts of the West, still today, there are Tattered Ruins of that Map, inhabited by Animals and Beggars; in all the Land there is no other Relic of the Disciplines of Geography.

Borges' short stories give lessons in Methodology . "El rigor..." is a perfect response when somebody criticizes a model for being an abstraction of reality. "Funes, the Memorious" explains why it is dangerous to consider all details of reality or history. Abstraction is a necessity.

The Credit Crunch of 1294

MCCXCIV !

Is the crisis over? (II)

I hope it is. But I think it is kind of sad that one of the boldest forecasts is based just on a historic correlation. There is no model or explanatory theory.

Is the crisis over?

Nicholas Bloom forecasted the 2009 crisis (take a look at his cool graph of stock market volatility since 1880). Now he says that uncertainty is falling and recovery in on the way.

Useful links for a world in crisis

Sourcetone: a music therapy on-line radio. (listeners outside the US face limitations);
Taxi fare calculator: World and Brazil. (HT: Ricardo Freire);
Ubuntu Pocket Guide;
Quick R: R for stata, spss and SAS users;
Vuze: by far the best torrent client for Windows and Linux;
Monty Python - The Movies (6 Disc Box Set) for 11 GBP (16 USD)!

Great Depression versus 2008 Crisis

Eichengreen and O'Rourke bring good and bad news:

To summarize: the world is currently undergoing an economic shock every bit as big as the Great Depression shock of 1929-30. Looking just at the US leads one to overlook how alarming the current situation is even in comparison with 1929-30.
The good news, of course, is that the policy response is very different. The question now is whether that policy response will work. For the answer, stay tuned for our next column.

(The graphs are awesome)

University of California at Berkeley: two syllabus

I bet that there will be no empty seats at Prof. Eichengreen's The World Economy in the Twentieth Century and at Prof.Voth's Financial Crises, Bubbles, and Crashes

HT Brad Delong.

Science, Financial Crisis, and Paul Romer

Paul Romer:

"...after Citibank made some bets that turned out badly in the Latin American debt crisis of the 1980s, its CEO John Reed helped mid-wife the Economics Program at the Santa Fe Institute. He wanted the new theoretical insights about financial crises that the new complexity scientists promised. Ever since, the complexity scientists have been telling us that markets are self-organizing systems. For the life of me, I can't see how this puts us way ahead. Didn't seem to help Citibank either, which I've noticed is back in the headlines.
(...)
I agree with the closing suggestion, that air transport is a good place to look for lessons about avoiding crashes. No matter what we do, we will still have financial crises, just as we still have plane crashes. But judging from our success in making air travel safer, it seems reasonable to bet on an institutionalized commitment to systematic data collection as a way to reduce their frequency and severity. As a traveler and an investor, I feel much safer in the hands of experts with good data than tourists from other scientific disciplines bearing new models.

Here.

Talkin' about science, there is a bonus.