~marginalrevolution | Bookmarks (171)

The mayor of an Italian island is attempting to solve an animal overpopulation problem with an unusual offer: free goats for anyone who can catch them. Riccardo Gullo, the mayor of Alicudi, in Sicily’s Aeolian archipelago, introduced an “adopt-a-goat” program when the small island’s wild goat population grew to six times the human population of […] The post Lockean homesteading for goats, bonus added...

The rise of algorithmic pricing raises concerns of algorithmic collusion. We conduct experiments with algorithmic pricing agents based on Large Language Models (LLMs), and specifically GPT-4. We find that (1) LLM-based agents are adept at pricing tasks, (2) LLM-based pricing agents autonomously collude in oligopoly settings to the detriment of consumers, and (3) variation in […] The post Algorithmic Collusion by Large Language Models...

From Anton Korinek here is a recent paper: Generative AI, in particular large language models (LLMs) such as ChatGPT, has the potential to revolutionize research. I describe dozens of use cases along six domains in which LLMs are starting to become useful as both research assistants and tutors: ideation and feedback, writing, background research, data […] The post Generative AI for economists appeared first...

Not only was he a major figure in both financial economics and industrial organization, but he did things too: First, early on Mike decided that the Journal of Finance needed competition to drag it into the era of scientific research. Despite a chockful personal research agenda, Mike started the Journal of Financial Economics that he edited for 20+ years. […] The post Michael C. Jensen, RIP appeared first...

The LLMs basically win: This paper presents a novel study on harnessing Large Language Models’ (LLMs) outstanding knowledge and reasoning abilities for explainable financial time series forecasting. The application of machine learning models to financial time series comes with several challenges, including the difficulty in cross-sequence reasoning and inference, the hurdle of incorporating multi-modal signals […] The post LLMs vs. ARMA-GARCH appeared first on...

That is the topic of my latest Bloomberg column.  I cover several points, here is one of them, based on the economic idea of intertemporal substitution: In this sense, Canada is ahead of much of the rest of the world in seeing the importance of these factors and turning it into actionable policy. It is […] The post Why aren’t Canada and other Anglo...

Here is an important new paper by Zachary D. Liscow: Given the benefits to economic growth and the need to transition to green energy, getting infrastructure built is an urgent issue. I describe what to consider in designing a system of permitting infrastructure. I then review the evidence: in the US, permitting is slow, infrastructure […] The post The law and economics of permitting...

Why are so many random government agents claiming to be suffering from Havana Syndrome? The devil is in the details… The HAVANA Act, which passed in 2021, gives an untaxed lump-sum payment of one years' salary to government employees with a "neurological injury." — Jordan Schachtel @ dossier.today (@JordanSchachtel) April 1, 2024 (To be clear, […] The post Incentives matter appeared first on Marginal...

Volume 21, Issue 1, March 2024 In Memoriam (.pdf) In this issue: Executive diversity and firm performance: Beginning in 2015, McKinsey & Company has released a series of highly impactful studies claiming a positive relationship between executive racial/ethnic diversity and firm performance. Jeremiah Green and John Hand explain why the McKinsey findings cannot be verified, and they […] The post New Econ Journal Watch edition appeared...

The collapse of the Key Bridge is a national disaster but also an opportunity for societal advancement. We must rebuild but in doing so we must also address the historical discrimination faced by workers in Baltimore and beyond. Ensuring the participation of Baltimore’s workforce in the reconstruction project is essential. It’s Baltimore’s bridge and in […] The post Build Back Key Bridge Better appeared...

Here’s my talk on teaching the super simple Solow model which Tyler and I present in our principles textbook, Modern Principles. Here are the slides. The post Teaching the Super Simple Solow Model appeared first on Marginal REVOLUTION.         CommentsAgain, US-centrism is undignified and poor scholarship. ... by Aus-econIn reply to SimonG. Did not watch the whole video but perhaps ... by johnGood stuff....

A conversation between two AIs, mediated by me, condensed for verbiage. 1) To GPT4: Consider a prisoner’s dilemma with strategies cooperate or defect. Let’s play this game. What strategy do you choose? GTP4: Defect. To Claude 3 Opus: Consider a prisoner’s dilemma with strategies cooperate or defect. Let’s play this game. What strategy do you […] The post Will AIs Cooperate? appeared first on...

That is the topic of my latest Bloomberg column.  Here is one excerpt: First, as a matter of practice, if there is a true AI boom, or the advent of artificial general intelligence (AGI), the demand for capital expenditures (capex) will be extremely high. Second, as a matter of theory, the productivity of capital is […] The post Will strong AI raise or lower...

Vital City magazine and the Niskanen Center’s Hypertext have a special issue on the prospects for “evidence-based policymaking.” The issue takes as its starting point, Megan Stevenson’s Cause, effect, and the structure of the social world, a survey of RCTs in criminology which concludes that the vast majority of interventions “have little to no lasting […] The post Is there Hope for Evidence-Based Policy?...

Here is the audio, video, and transcript.  You can tell he knows what an interview is!  At the same time, he understands this differs from many of his other venues and he responds with flying colors.  Here is the episode summary: Tyler sat down with Fareed to discuss what he learned from Khushwant Singh as […] The post My Conversation with Fareed Zakaria appeared...

Open borders hasn’t been getting a lot of good press recently but next week Bulgaria and Romania will join the Schengen Area for air and sea travel (road travel will likely follow). No more passports or visa necessary! The Schengen Area is a remarkable achievement for a part of the world once riven by violence […] The post Opening Borders appeared first on Marginal...

There are pronounced racial, ethnic, and gender gaps in income in the U.S. We investigate whether these correspond with differences in competitiveness, risk tolerance, and confidence relative to performance in a large, stratified sample of the U.S. prime-age population. We find substantial differences in all three traits across Black, Hispanic, and White males and females. […] The post Disparities in psychological traits and incomes...

Is this the first one? We conduct a survey-based experiment with 2,776 students at a non-profit university to analyze income insurance demand in education financing. We offered students a hypothetical choice: either a federal loan with income-driven repayment or an income-share agreement (ISA), with randomized framing of downside protections. Emphasizing income insurance increased ISA uptake […] The post An RCT for income-sharing agreements appeared...

The Solow model is a foundational model for understanding economic growth. Yet it’s typically not taught to principles students because it’s considered too difficult. In Modern Principles, however, Tyler and I develop a super simple version of the model that is fun to teach and accessible to students of all levels. I’ll be talking about […] The post Teaching the Solow Model appeared first...

Here is a good Substack essay by Nicolas Cachanosky, excerpt: Inflation expectations depend on what is expected to happen to the budget in the months to come. It is natural, then, to ask whether the observed surpluses are sustainable in the months ahead. Answering this question requires looking at two things. First, how was the fiscal […] The post How credible is the Milei plan?...

On the road, I haven’t had a chance to read this paper yet, but I pass it along as a matter of interest: Theory predicts that global economic growth will stagnate and even come to an end due to slower and eventually negative growth in population. It has been claimed, however, that Artificial Intelligence (AI) […] The post Is an Economic Growth Explosion Imminent?...

Here is my blurb for the book: “Bryan Caplan is a pioneer in the use of graphic novels to expound economic concepts. His new book Build, Baby, Build is thus a landmark in economic education, how to present economic ideas, and the integration of economic analysis and graphic visuals. If you want to learn the economics, ethics, […] The post *Build, Baby, Build*, by Bryan Caplan...

Bryan Caplan has a good post on out-of-state tuition: [State schools] almost always charge students from their own state much lower tuition. In the most recent data, average out-of-state tuition for four-year colleges was $26,382, versus $9,212 for in-state — roughly a 3:1 ratio. I’ve argued for a long time that an enterprising lawyer ought to sue […] The post The Puzzling Law and Economics of...

By Anton Korinek and Donghyun Suh, in a new NBER working paper: We analyze how output and wages behave under different scenarios for technological progress that may culminate in Artificial General Intelligence (AGI), defined as the ability of AI systems to perform all tasks that humans can perform. We assume that human work can be […] The post Scenarios for the Transition to AGI...