Book Review: Poor Economics – A Radical Rethinking of the Way to Fight Global Poverty

Originally posted on Do No Harm:

I recently finished reading Poor Economics: A Radical Rethinking of the Way to Fight Global Poverty  by Abhijit Banerjee and Esther Duflo. The co-authors who are rockstars in the field of experimental development economics have pioneered the randomized control trials (RCTs) movement, which offers a rigorous evaluation of development interventions. The book draws on the evidence generated from RCTs but complements it with anecdotes, which offer a nuanced rethinking of how we understand poverty and subsequently design anti-poverty policy.

In a nutshell, the book illuminates the multi-faceted economic lives of the poor. What sets it apart from numerous other books on similar topics is the anthropological approach taken by the economists. The book shines in the authors’ visible efforts to engage closely with the poor and understand how they make decisions and adopt certain coping strategies as narrated through stories in the text. They highlight the inherent contradictions in the…

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Life or Death Professional Development

dmerciar:

Great post…no comment within the body of the piece as to the banning of guns in the first place, but that wasn’t what this was about…

Originally posted on gadflyonthewallblog:

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You know what’s funny about school shootings?

 

It’s the only time the public still universally loves teachers.

 

We don’t trust them with collective bargaining rights. We don’t think they deserve a decent salary. Heck! We don’t even trust their judgement to design their own teaching standards, lead their own classrooms or be evaluated by their own principals!

 

But when armed assailants show up at school, then we think teachers are just great.

When angry teens arrive rifles strapped to their trench-coated backs, carrying duffel bags full of ammunition – then teachers are heroes.

 

I guess you can’t standardize your way past a bullet.

 

My school district had an outstanding training today. Administration brought in current and retired FBI agents, local law enforcement and EMTs to practice active shooter drills with the teachers.

 

We spent the morning learning about common factors between various school…

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Lies that economics is built on

Originally posted on LARS P. SYLL:

Peter Dorman is one of those rare economists that it is always a pleasure to read. Here his critical eye is focussed on economists’ infatuation with homogeneity and averages:

You may feel a gnawing discomfort with the way economists use statistical techniques. Ostensibly they focus on the difference between people, countries or whatever the units of observation happen to be, but they nevertheless seem to treat the population of cases as interchangeable—as homogenous on some fundamental level. As if people were replicants.

You are right, and this brief talk is about why and how you’re right, and what this implies for the questions people bring to statistical analysis and the methods they use.

Our point of departure will be a simple multiple regression model of the form

y = β0 + β1 x1 + β2 x2 + …. + ε

where y is an outcome variable, x1 is an explanatory variable…

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Bootstrapping made easy (wonkish)

Originally posted on LARS P. SYLL:


In Gretl it’s extremely simple to do this kind of bootstrapping. Run the regression and you get an output-window with the regression results. Click on Analysis at the top of the window and then on Bootstrap and select the options Confidence interval and Resample residuals. After having selected the coefficient for which you want to you get bootstrapped estimates, you just clickOK and a window will appear showing the 95% confidence interval for the coefficient. It’s as simple as that!

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The Economic Consequences of the Overthrow of the Natural Rate of Interest

Originally posted on Fixing the Economists:

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For quite a few months I have, on this blog, been alluding to a paper that I had written which showed that the natural rate of interest is implicitly dependent on the EMH in its strong-form in order to be coherent. I have finally published this paper (in working paper form) with the Levy Institute and it can be read here:

Endogenous Money and the Natural Rate of Interest: The Reemergence of Liquidity Preference and Animal Spirits in the Post-Keynesian Theory of Capital Markets

Some notes on the paper.

The motivation for the paper was that when reading up on endogenous money during my degree I found that mainstream economists had largely integrated it in their more recent models. This integration, as the paper notes, usually took the form of a Taylor Rule. I should be clear that although this had become standard practice at some levels of the discipline…

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The myth that sold the financial bailout

Originally posted on Real-World Economics Review Blog:

from Den Baker

If there had been political support for massive spending in these areas, the Depression could have ended in 1931 instead of 1941.

Today marks the sixth anniversary of the collapse of Lehman Brothers. The investment bank’s bankruptcy accelerated the financial meltdown that began with the near collapse of the investment bank Bear Stearns in March 2008 (saved by the Federal Reserve and JPMorgan) and picked up steam with Fannie Mae and Freddie Mac going under the week before Lehman’s demise. The day after Lehman failed, the giant insurer AIG was set to collapse, only to be rescued by the Fed.

With the other Wall Street behemoths also on shaky ground, then–Treasury Secretary Henry Paulson ran to Capitol Hill, accompanied by Federal Reserve Chairman Ben Bernanke and New York Fed President Timothy Geithner. Their message was clear: The apocalypse was nigh. They demanded Congress make an open-ended commitment…

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Academic Sophistry: Dart-Throwing Monkeys and the EMH

Originally posted on Fixing the Economists:

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The other day I did a post on the Efficient Markets Hypothesis (EMH) that generated some discussion. I want to deal with a few of the issues raised in a some upcoming blogposts.

One issue of interest was that many EMH proponents said: “Sure, Warren Buffett and Keynes beat the market over a long-period we’re not saying that. Some people might beat the market out of pure luck.” Well that seems like rubbish to me.

Think about this. If the EMH says that no one single person can beat the market over the long-run that is a testable proposition. But if they then say that some people might but this is “by luck” that is not testable. That is, in fact, based on an a priori assumption that anyone who beats the market did not do so by skill.

Now, personally I think that some people beat the market by…

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