Marginal Revolution

Market Design blog

It's new and it's being run by the Nobel-worthy Al Roth of Harvard.  Visit it here.

The need for reliable information

I very much agree with this sentiment of Mark Thoma's:

There has been much debate about whether the financial crisis is driven by lack of liquidity or from fears about lack of adequate capital and solvency, but I'm starting to think a third component is important as well, the complete breakdown of traditional information flows, and a loss of confidence in the models used to evaluate that information. Markets need information to work properly, and the information financial markets need is not available.

Here is more.  I do not wish to suggest that we abolish currency and T-Bills, but the deeper (and less stable) the private demand for these assets the harder it is to generate socially useful information from the trade in other assets.  Maybe today we're in a world where the 1980 Grossman-Stiglitz paradox of information partly holds.  It's not that the status quo price is already efficient, but rather no one gathering information feels they could benefit from swapping with the noise traders and so in turn not enough information is gathered.

Fiscal policy poll

What are the times in history -- whether in the U.S. or elsewhere -- when a large-scale application of expansionary fiscal policy has been effective in raising a country out of a recession or depression?

I've already discussed World War II and the United States, so whether or not you agree with me there is no need to mention that episode again.  I'm not (yet) looking for a debate rather I am conducting an opinion poll.  Over the next few weeks or months I hope to investigate some of the cases you mention and see what is the verdict of history.

Assorted links

1. Good French meals: not in France

2. Color pies of movies

3. Markets in everything: a tunnel complex in central London

4. Video of giant squid

5. Paul Krugman: What to Do

6. Amity Shlaes on the Depression

No way would I go bungee jumping

Peter, a loyal MR reader, ran text from this blog through some kind of on-line Myers-Briggs contraption and came up with the following (under the fold)...

INTJ - The Scientists

The long-range thinking and individualistic type. They are especially good at looking at almost anything and figuring out a way of improving it - often with a highly creative and imaginative touch. They are intellectually curious and daring, but might be physically hesitant to try new things.

The Scientists enjoy theoretical work that allows them to use their strong minds and bold creativity. Since they tend to be so abstract and theoretical in their communication they often have a problem communicating their visions to other people and need to learn patience and use concrete examples. Since they are extremely good at concentrating they often have no trouble working alone.

Analysis
This show what parts of the brain that were dominant during writing.

The analyzer is here.

One very bad economic indicator

A Wal-Mart employee in suburban New York died after he was trampled by a crush of shoppers who tore down the front doors and thronged into the store early Friday morning, turning the annual rite of post-Thanksgiving bargain hunting into a Hobbesian frenzy.

Here is the story.

Questions that are rarely asked

Richard Green writes to me:

If the likes of Hitchcock and others could turn works that were mediocre in literature into great films, I wonder what mediocre films could have been great literature.

The point is not to come up with a list (though some of you will) but rather to ponder what we can learn about literature as a medium.  He continues:

...literature adapted from films is almost (and this is a hedge because my experience says invariably) hack work, rushed and held in the lowest regard...Is it because literature is the elder medium, and has a higher status which would prevent condescension to recognising a prior from another medium? Is it because creation is more personal to a individual writer than the inevitable collaboration of film, and so they are loath to allow others' work in?

Movies need (at least) a plot and a script and that can be taken from a book, with results of varying quality of course.  But I do not have an equal understanding of which factor of production is scarce to writing a good novel.  Do professional writers benefit more from showing originality in creating a world and also creating a language?  There is plenty of fan fiction based on Star Trek and the like but few professional writers take this same tack.

A simple default hypothesis is that movies are more powerful and more real than books.  So a movie based on a book won't necessarily be overwhelmed by its source but a book based on a movie will be.  Of course there are many books adapted from oral tales so maybe it is the addition of the pictures that is so overwhelming.  I know only a few books adapted from paintings, most notably Gert Hofmann's excellent Der Blindensturz.

Sentences to ponder

No rational regulator concerned with substantive transparency would approve of common stock, if it were a novel investment vehicle. It guarantees no cash flows whatever, its "control rights" are so weak for most purchasers that representations thereof should be viewed as fraudulent. Empirically common stock behavior is very weakly coupled to the performance and health of the firms that stocks fund. The only instrument in wide use more substantatively opaque than common stock is fiat money.

Here is more, interesting throughout.

How many Obamas are there?

According to databases, there might be fewer than 20 Obama families in the United States, compared with more than 11,000 Clintons and 60,000 Bushes...

Many of these people are being treated like VIPs.  But they are not mostly from Kenya:

Nicanor, like most of the Obamas in this area, is a native of Equatorial Guinea. The name is common there -- much more so than in Kenya, in fact, where the president-elect's father was from -- and Guineans wonder whether they can make their own claim to a branch of the president-elect's family tree. There are also a few Obamas of Japanese decent.

Here is a listing of all appearances of the word or name Obama, which includes lots from Japan, including a cable TV station.  Here is the only known Obama in the UK.

Now that Brian Cowen (read the section of that link on "public image") is Prime Minister of Ireland...

Assorted links

1. Prices, Poverty, and Inequality: Why Americans are Better Off Than You Think, by Christian Broda and David E. Weinstein.  The full text is free on-line at the link.

2. The economics of Scientology.

3. 5, 322, and $4250 are the relevant numbers in this story of a journal run amok.  Shocking (or is it?).

4. NYT 100 Notable Books.  It's an OK enough list and you can think of these as the mainstream picks.

5. Questions about bagels.