The Manski Critique

Chuck Manski’s recent NBER working paper, “Policy Analysis with Incredible Certitude” (non-gated version) ought to be a must-read for anyone doing or interested in policy analysis.
The study is written in an accessible way, such that it can be in principle followed without explicit academic training in Economics/Econometrics (there are plenty of further references for the technical details), and essentially sums up some of Manski’s conclusions from his well known research agenda on empirical methods in social sciences such as partial identification, and using decision theory with credible assumptions, for policy inference– see for instance his books on these topics (which any applied econometrician should have on his/her shelf; though I confess, my copies are currently still in Aarhus, awaiting my shipping/bringing them to Chicago), Identification Problems in the Social Sciences (1995), Partial Identification of Probability Distributions (2003), Social Choice with Partial Knowledge of Treatment Response (2005), and Identification for Prediction and Decision (2007).  → Read more

Sunday night econlinks: Interviews edition

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  • Here’s an excellent answer if you ever wondered why people are interested in finding prime numbers with tens of millions of digits.
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Read of the week / Quote of the week

My read of the week is John Cochrane superbly answering to this… well, “protest letter” (the latter being the reason why one of the labels for this post is “pathetic”). Probably only Milton Friedman himself could have done a better job than Cochrane here… I actually choose the following paragraphy as quote of the week:

Milton Friedman stood for freedom, social, political, and economic.
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Econlinks for 27-12-’07

  • How to avoid recession in USA: Greg Mankiw’s answer. Gary Becker and Richard Posner advocate a similar perspective (the argument is centered, of course, on the subprime housing mess). Former Fed boss Greenspan already said that one should do absolutely nothing and wait for the bubble to break on its own, just as the people above (e.g.
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Econlinks for 27-11-’07

  • Becker and respectively Posner, on tax evasion. Why is tax compliance higher than one would expect (with a reservation here: it also follows from Posner’s argument than in fact tax evasion isn’t necessarily lower than rationally expected…) and is that mainly due to the rational fear of punishment or to the taxpayers’ feeling of moral duty/ fairness etc?
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One hour conversation with Richard Freeman (on YouTube)

Shortly after having posted a link to an IZA clip about Richard Freeman among a recent ‘econlinks’ post, I discovered, via Greg Mankiw, this other link to a very recent (October 31st) whole one hour interview with Freeman on YouTube, within the “Conversations with History” series, having Harry Kreisler as host.  → Read more

Best “Political Compass” so far. And where I stand on the left-right political-economic plan

You should do this ‘politiquiz‘ (particularly if you are already a politician/ decision maker or consider a career in this direction :-)). There are lots of things that can still be improved in it, but it is the best “where you stand on the political/ economic dimensions” questionnaire I’ve encountered so far.  → Read more