15 March 2011

Notes from the ASSA

Every year, 10,000 economists get together in January to talk, drink and look for jobs. I went to Denver this year, and here are a few notes of interest:
  • The great irony is that there are so many sessions running at the same time (38-44 in parallel, each with 3-5 papers) that attendees have no hope of seeing everything of interest. I figure that it's possible to see 12 of 400 sessions. Authors/presenters cannot listen to similar topics when they are presenting. This S>>D imbalance results from "publish new stuff and move on" incentives that give academics no reason to spend promote published work or listening to others.* All that matters is more More MORE!

  • The discussion in the panel on "Afghanistan – Costs and Exit Strategies" [mp3 recording] centered on a few points of agreement:
    • Corruption is worse because power is centralized in Kabul. Roger Myerson (Nobel laureate) suggested that decentralization would mean that locals customize corruption more to their needs.
    • Drug cultivation, trade and trafficking (aided by the US drug war) was an elephant in the room that funded the Taliban, alienated farmers from soldiers, and corrupted institutions. (NOT from The Onion: Mexican Drug Lord Officially Thanks American Lawmakers for Keeping Drugs Illegal)
    • Everyone agreed that Afghanistan was bad for the US, which was wasting money, lives and diplomatic will on a hopeless case. Why is the US still there? Machismo ("We don't cut and run") and rents to the military industrial complex. About 30 cadets from the Air Force Academy attended. Their economics professor, an officer and veteran of Afghanistan, was adamant that they could deliver aid and security ("people have thanked us") but blind to larger circumstances that made his efforts unsustainable.

  • Sexton and Sexton** on Saving the planet Being cool: "Using market-level data on vehicle ownership in Colorado, we have empirically identified a significant conspicuous conservation effect related to Toyota Prius demand... consumers are willing to pay up to several thousand dollars to signal their environmental bona fides through their car choice."

  • Robert Schiller: Economists as Worldly Philosophers (or not): "If specialization is too extreme, it has a tendency to lead to carrying original ideas too far, beyond their useful purpose. Specialization coupled with strong competitive pressures within academia leads to a situation in which academics often feel that they just do not have time to ponder broad issues and learn even basic simple facts outside their specialty. Their general knowledge may be embarrassingly limited, and so they may retreat into their own specialty and produce research which contributes in small ways to the development of the field, but fails to pay attention to the larger picture." Anthony Atkinson, meanwhile, argues that economists need to spend more time on welfare economics, i.e., the distribution of wealth and happiness in society.

  • Lord Stern came from London to give a talk about climate change. He said that the move to a post-carbon economy was not going to be painless, but it would be relatively easy to use some sort of tax. One member of the audience pointed out a big flaw in this claim: $trillions in taxes might be used to move to post-carbon life that's no better than today. People would rather spend the money on adding fun and excitement to their carbonized life.

    He likened action on climate change to another industrial revolution but his analogy is imperfect. The industrial revolution was led by profit seekers in markets. Climate change actions are led by bureaucrats and politicians using command and control processes. Even worse, politicians from the US and China agreed to do nothing and block others from advancing mitigation.***

* The Economist writes: "It is harder than ever to keep abreast of progress. After running four issues a year for the past 100 years, the AER will this year publish six. The journal has already produced four specialised offshoots. Economics is producing a torrent of research, coursing in all directions." Although this is spun as a positive development, I think that we need to cut back on the "torrent" (spending more time on refining and promoting ideas in each paper) while maintaining "all directions."

** Son and daughter of my PhD adviser, Rich Sexton, who worries that his kids may be working too hard. :)

*** Several people have told me that "China is very serious about climate change and going green." China has 1.3 billion people with lots of different goals. Going green does not appear to dominate those goals.

No comments: