Long absence

~ cogiddo ~ Leave a comment

I am very bad at maintaining this blog. On checking, this last weekday of my spring break for 2019, I see that the last post I made was in December 2018!

Fear not. I am back. It’s just that my work has kept me busy for a good reason. As I am getting older, I find that my interactions with undergraduate students are more and more rewarding, especially when these students are part of the elite, self-selected group of those who choose to follow the rigorous Mathematical Economics major. At the same time, my excitement for a book project I have going on has been growing, and the time I have had to make and edit photos have declined.

I am back to stay, though. And to compensate for the absence of my photos from this blog lately, here is one of my latest from a visit to the Morris Arboretum.

Morris Arboretum, 2019-02-03
Morris Arboretum, 2019-02-03

The Economics Nobel lectures

~ cogiddo ~ Leave a comment

When we sat down for breakfast, I opened my iPad on Facebook, as usual at this time of day. I saw a notification from the Nobel Foundation that the Nobel lectures on economics were about to be streamed live. I had forgotten, in the hectic days of winding down the semester, to check for the schedule and I feel extremely lucky I got to watch these lectures by accident.

There was an unfortunate glitch with the audio which forced the stream to be stopped and restarted. As a result, I only got to watch properly the second half or so of the lecture by William Nordhaus, but the streaming of the lecture by Paul Romer went ahead after that without problems.

Both laureates gave great talks, I thought. Of course, I am biased in favor of Romer, as a former student of his. The same ability to explain deep, complicated mathematics that he displayed when I was taking his first-year mathematics-for-economists PhD course in Rochester in 1984 was evident in his engaging Nobel lecture. I particularly liked his one (and only!) slide beyond his cover slide, showing students in Africa reading their textbooks on the side of a highway near the local airport, because there were streetlights there, making it possible to study at night, while their houses had no such luxury. 

Romer went on to explain in very simple terms the way ideas and their sharing and combinations have made it possible for humans to make progress in material, as well as moral, terms. I was heartened by his talk about how technological progress has expanded the circle of people (and now other sentient beings) that many humans consider US rather than THEM.

Not a small contribution to human progress in both material and moral terms from Paur Romer, an undergraduate physics major who went on to get his PhD and launch his career by doing work that could have easily been considered too arcane, were it not for his commitment to share his ideas in the clearest possible terms for others to use and combine them for yet more ideas to help humans live better.

Long absence from this blog ends now with a post about how experiencing income inequality when growing up affects one’s preferences for income redistribution policies

~ cogiddo ~ Leave a comment

The Fall semester has proved to be busier than I thought it would be. However, I really do want to come back to this blog, and a paper about inequality I encountered today gave me the push I needed.

The paper is Experienced inequality and preferences for redistribution by Cristopher Roth and Johannes Wohlfart, Journal of Public Economics 167 (2018) 251-262.

The authors use large national datasets to examine the following question: if someone experienced higher inequality when growing up, will they be more or less in favor of redistribution?

Their answer surprised me. Quoting from the abstract of the paper:

people who have experienced higher inequality during their lives are less in favor of redistribution, after controlling for income, demo- graphics, unemployment experiences and current macroeconomic conditions. They are also less likely to support left-wing parties and to consider the prevailing distribution of incomes to be unfair. We provide evidence that these findings do not operate through extrapolation from own circumstances, perceived relative income or trust in the political system, but seem to operate through the respondents’ fairness views.

(Roth and Wohlfart 2018, abstract)

People who grew up experiencing higher inequality demand less redistribution? Of course that is fine if you think of those in the top of the distribution, but the way inequality has developed in a skewed manner in most countries, the majority of the people should be in a less advantageous position and might be expected to have a desire for redistribution policy to reduce the inequality. But they don’t! The authors offer this potential explanation:

One plausible interpretation of these findings is that growing up under an unequal income distribution alters people’s perception of what is a fair division of resources, and thereby reduces their demand for redistribution.

(Roth and Wohlfart 2018, Page 252)

This is like thinking of slaves becoming used to the chains and eventually fond of them. I want to absorb the message of this paper more deeply, at least for my forthcoming class on economic inequality in the Spring 2019 semester, and if I have further thoughts to share on this blog, I will do so.