Thursday, October 30, 2008

Hat Tip

Two of my favourite Memorial professors have signed a letter along with 253 other Canadian academic economists advocating the implementation of a national carbon tax.

I can hope that if I ever back it back across the border, I won't have to sign a similar letter, because it will already have been done. Via Mankiw.


Whoever linked to me managed to send me 2000 visitors within 24 hours a couple days ago, which is about as many as it takes me four months of honest posting to get. If you are part of this surge, please let me know from where it stems.

EDIT: And a feel-good tidbit: the Wheat Board wins a trade victory for Canada.

EDIT: Hypocrisy of the day: the CRTC brags about bringing more choice in television to consumers. The CRTC being the agency charged with regulating Canadian television and hence by definition limiting that choice.

I Can't Help Myself

Oh my. Further, this guy is attending UCSD, or at least was sighted on the campus there.

The sad thing is that many economists feel like they're hit over the head with this sort of thing on a regular basis on a number of 'principles' results.

Tuesday, October 28, 2008

Good Links

A Rochester dentist is organizing a candy buyback, offering to pay $1/pound for Halloween treats. Presumably the smart kids will take the junk to her and use the money to buy decent stuff. No word on whether she accepts soft drinks in large volumes - which can cost less than $1/pound.

Export Development Canada thinks the loonie will average .85 in 2009. I'd like to see a confidence interval on that. Neither they nor anyone else have any idea where the dollar will be, no more than anyone knows what the oil price will be a year from now.

Volkswagen was temporarily the world's largest company as their shares spiked to over $1600 Canadian as hedge funds needed to cover shorts betting that the Porsche buyout would fail. The historical range is less than three digits.

On the technological front, Codeweavers is giving away all their software for free today due to the fall in gas prices. They make compatibility software for Mac/Linux boxes who want to run Windows apps.

And finally, I have a new web browser.


Turns out I had the highest mark on the micro midterm by about an epsilon (.1/16). I'm surprised, I'm not here to do micro. Frankly, it's only because half the test was a really, really weird question that I thought the professor liked and nobody else thought he'd ask. It's particularly nice to get it back the day after a classmate posted the following on their own blog: "It appeared not too difficult (neither too easy) to prove that I am one of the most brilliant students in my class and possibly in many years." From the results the professor posted, I beat him by at least 12%.

The PhD program is, in every sense, a marathon. What's more, nobody particularly cares how well one does in these courses as long as they do satisfactorily - at which point it becomes all about one's ideas and research. Laying claim to the pole position two months in is meaningless - the metric is placement and then the CV in fifteen years.

In truth, this is an aberration - the person in question typically scores higher on all the assignments and did so on the other midterm we've gotten back. I expect him to continue to do so. He certainly seems more motivated, and given the midterm was only two questions, one's score could adjust dramatically based on a single error.

P.S. Yes, the department deliberately tries to foster this sense of competition among students - for example, at the end of the year, funding is adjusted depending on one's relative placement within the class.

Monday, October 27, 2008

Economics of Intel

I just came back from the reception for people who won such-and-such a fellowship, where I got a great chance to talk one-on-one with the UR alumnus that runs Intel's high-end server division. He led the group/was responsible for figuring out how to change the voltage/frequency of a chip on the fly. 40 minutes or so, let me throw down what I remember - I wasn't exactly prepared to take notes.

-Intel creates a new chip fabrication process every two years, at a cost of $3billion or so. It used to be every 3-4 years, but it's been consciously accelerated. The business is cutthroat.

-Most of their research is fabrication. They only have one small lab in Oregon doing circuits. The quality of the fabrication process is responsible for about three-quarters of the cost/quality of a microprocessor.

-Intel and AMD have completely different production processes. Intel's per-unit production cost is significantly less than AMD's. He claims their method is more reliable, too, but the technical details escape me. AMD is apparently still learning, they pay IBM lots for technical expertise.

-Within five years, they estimate that Google will purchase one-third of all microprocessors. Google already exerts significant monopsony power in the market, since when they construct a new standard build, the chips have to come either exclusively from AMD or Intel. AMD's last few profitable quarters a couple years back can be traced to their holding of the Google contract.

-Large scale purchasers like Google, eBay, Amazon, don't buy high end product - just tons of the basic units, what anyone would have in their homes. Margins on servers are much, much higher than on microprocesors.

-4 years of nonstop running of a modern Intel processor will result in a .1% chance of failure.

-Moore's Law still has several years to run yet.

Think that's the basics of it. Was a great chat.

Sunday, October 26, 2008


Doing well in one of these programs entails becoming a little afflicted with the so-called Stockholm syndrome. It's extremely difficult for me to actually concentrate for sixty hours a week, especially when simply studying, as opposed to actively completing problem sets.

The real danger lies in the fact that very, very few really enjoy grinding out this sort of time over the first-year material. None of us actively dislike it, mind you - this is a volunteer ship - but occasionally when I take a break I suddenly become aware of what else I could be doing, and it's very hard to force oneself back to studying for Monday's macro midterm. I think this aspect of graduate life is easier on the people who are married, late-20s, than on the fresh out of undergrad crew.

Completely blew a tire Friday afternoon, haven't been able to do a spot since. Here goes.

Friday, October 24, 2008


Slate gets sloppy.

The income of a typical family hasn't risen in real terms since 1999, while the costs of basics such as health care, energy, food, and housing have soared.

Which sounds terrible, except real income means, by definition, that it's already been adjusted for those price changes. There's a few other spots where the author misleads, deliberately or not, to make a point.

Thursday, October 23, 2008

Department Updates

One of the professors is hosting a Halloween party. Quote: "There should be room for 10 cars in the driveway."

The micro midterm is down, though I think the class may have collectively struggled with that. A lot of esoteric proofs about the joint rationalizability of profit and supply correspondences. This year's micro curriculum is so far very much removed from the canon - that is, MWG. A weird proof of Arrow, a ton of stuff on rationalizability, a ton of stuff on parametric monotonicity - supermodularity, lattices, etc, some obscure theory of the firm stuff.

Sunday, October 19, 2008

Life in the Department

One of the reasons I gave up curling is that it's a very social sport. At the junior level here back in St. John's, one needs to invest substantial resources in many banal rites to prove allegiance to the team, so on and so forth.

I don't want to say it's the same here, but within the first year class, it seems to me that there's a feeling of conspiracy and competition haunting the halls. A handful of people have gotten on good terms with older students by dint of ethnicity, obtaining access to old midterms or whatnot, but they certainly don't circulate them freely. I was once offered the time and location of a group meeting to work on an assignment - in exchange for my solutions to a certain problem in a different class.

Either way, it's frustrating at times. I feel like my ability to handle the coursework has improved markedly since I've gotten here, but that I've gotten nowhere socially with most anyone.

McCallum's CV

John McCallum's IDEAS page.

Really, it's pretty impressive. 3 AER is good for most anyone. He's in the top 5% of all economists in a number of metrics, which is also good, especially for someone who hasn't been an academic since 1994 or so. I'd be quite happy with that CV in 25 years.

That being said, Dion took an academically higher ground on economic issues, and look where it got him. One wonders if the Liberal Party is willing to make a stab with another intellectual.

Wednesday, October 15, 2008

Stories From the Front Lines

Metrics midterm this morning. Five minutes in, half the class (myself included) realizes the first problem is wrong - the given pdf isn't actually a pdf; the multiple integral evaluates to 0.8. Professor didn't stick around to spectate and didn't return until 40 minutes in, responding by changing the pdf to what it was supposed to have been. Uproar.

Well, not really uproar. But a lot of people were shooting really evil looks.

In other news, scored 61% on the math midterm, slightly below average. I think my knowledge of the material is better than that, so I'm slightly disappointed. There were a number of people who scored less than half that, apparently. I would bet higher for 'metrics. Micro tuesday.

Other news; one of the profs is leaving for Italy. I can't say much, because I've never even seen him.

If there's any requests for syllabi, coverage, etc, let me know.

Monday, October 13, 2008

Midterm I,II

Again, for those following the stream of Rochester information. Conversation with the TA for the class has revealed that half the class failed (<50%).

Saturday, October 11, 2008

The Coasian Role

Apparently there's some controversy over where certain groups in Newfoundland ought to hold conventions.

Basically, there's not enough hotel space outside of St. John's, but Corner Brook and Gander want the economic benefits that come from having attendees kicking around town for a few days.

Don't hold your breath for a welfare-improving monetary transfer to Corner Brook and Gander in exchange for all the conventions being held in St. John's.

Budget Crunch

Oil closed today at $77.70. And by this I mean the Newfoundland provincial budget is totally shot. Completely. If it stays like this for any length of time, it will be back to the days of deficit in short order.

People talk about Newfoundland becoming a have-province. Even in the best scenario, it was only going to be for a few years until White Rose and Terra Nova played out. With the recent goings-on, it may well not happen at all.

Discussing have-not status is of course misleading, though. Even with oil at $130, the average Ontarian would still draw a higher income than the average Newfoundlander.

Thursday, October 9, 2008

More Credit Squeezes

The famous US National Debt Clock in Times Square has run out of digits as the American debt surpasses $10 trillion.

Field Options

In case anyone reads this space for the low-down on Rochester, here's the graduate course options next term that aren't first-year courses:

Topics in Labour Economics
Special Topics in Labour
International Finance
Special Topics in International Finance
Topics in Microeconometrics
Economic Mechanisms
Seminar in Macro-Labour
Political Economy II

I'm surprised too.

Tuesday, October 7, 2008


I placed an Amazon Prime (free two-day shipping) ad on the sidebar. I want to make clear one thing. If you subscribe to the offer and do not cancel automatic renewal (which can be done at any point through your account options), Amazon will automatically bill you when the trial expires - $79, last I checked.

If you do look into the free offer - and I found it exceptional for quick delivery of textbooks - please cancel automatic renewal immediately, so you don't forget.

Devil's Advocate

Here's how to effectively oppose the bailout. I don't even drive a car, but there's a gas station within sight of my house. Gas is down fifty cents a gallon here over the last month. It's going to fall further soon, now that oil is plumbing new lows. The truth of the matter is that the bailout is not designed only to enrich Wall Street execs the minute they scrape their knee, but to keep oil prices up so the oil companies and our friends in the Middle East don't get angry, too!

Obviously not true, but if someone care to polish that statement, I'd bet a lot of people would believe it.

Saturday, October 4, 2008

...We're Missing Something Here

Oh, a picture. How rare. Notice how economics isn't there, despite things like Russian and Aboriginal Studies getting a spot? This is taken from the MUN library page. At many universities, economics is the most popular major. What happened to MUN?

Friday, October 3, 2008

The Nature of Legislation

Blog posts are writing themselves these days. Stress relief.
Treasury Secretary Henry Paulson proposed the rescue package last week as an emergency effort to get billions of dollars worth of bad housing-related investments off the books of financial firms. Since then, the plan has swelled from a three-page document to a 451-page piece of legislation loaded with $150-billion worth of extras. They include:

Dropping a 39-cent excise tax on wooden arrows made for children, a cause of politicians in Oregon to help manufacturers in their state[.]

Full article here.

Heard Around the Department, I

I hope this will be a continuing series. I'm not sure if this was said by a graduate student or Prof. Landsburg, but one of them deserves the credit and this may well have been said elsewhere. Excuse any slight paraphrasing:
The correct analogy as to why Buffett supports the bailout is the poker one. He's the seasoned veteran, playing cards against the toughest in the world for decades. All of a sudden this inexperienced newbie walks up to the table with $700 billion in chips. Of course Buffett wants him at the table!

Thursday, October 2, 2008

The Chinese Inflation Effect

From the BoC:
Our results suggest that while China’s negative effect on global inflation has been quantitatively modest, it has increased in absolute terms since the early 2000s. We also find evidence that, for most countries examined, competition with domestic suppliers has been the most important channel.

I remember when I had time to write commentary. Posting is just assurance that I have control over something.


A particularly unscientific study of the relation between business cycles and graduate school entrance.


It really bothers me - against what I know of economics - that given the fact I don't have a car, I am occasionally constrained to pay $3.99 at the corner store for a gallon (3.78L, for those of us lucky enough to live in saner places) of milk, when those with cars can purchase the same gallon for $2.62 at the Wal-mart, less than three miles distant. My transport costs are usually higher than the differential, so I'm maximizing utility accordingly, but it still bothers me. Further, the chocolate costs about 30% more than the white, regardless of store. I can't explain that, either.

The real kicker is, of course, that a gallon of milk back home costs about $6.60.

Wednesday, October 1, 2008


Today I noticed that I've developed a distinct callous on the inside of my right-hand middle finger - the part of my hand supporting the pen or pencil from below.