Wednesday, May 30, 2007

Underdevelopment and Development in Brazil

Nathaniel Leff's book is superb. I guess that the the English edition is out-of-print. By chance, I've just found out that the Brazilian edition is available here.

Tuesday, May 29, 2007

London for Economists I

Pay a visit to Jeremy Bentham at UCL. Drink a pint in his name here.

Monday, May 28, 2007

The adjusted tax freedom day

May 26th was the tax freedom day in Brazil. In the UK the date is celebrated next week and in Sweden only in August.
Does this mean that Brazilians are in a better situation than the British or Swedes? I do not think so. Therefore, I propose the adjusted tax freedom day: the quality of public services in Brazil is so poor, that we have to go private. So, the values that the Brazilians spend on private health, basic education and security should be added to the tax burden in order to calculate the adjusted tax-freedom day. It is not difficult to calculate and it would provide more precise indicator of the relation between society and State in Brazil.

Sunday, May 27, 2007

"Treating discrete variables as if they were continuous"

I confess that I see statisticians as the police of econometrics. If we start behaving badly, they will intervene and control the riot.

However, Andrew "Multilevel" Gelman surprised me. He wrote that there is no problem in principle with running regressions where discrete variables are treated as continuous. I thought that this was a crime, committed only by the most incautious members of the econ brotherhood.

Heterodox Versus Ortodox

"Nurture your research programme and do not spend your time criticizing other approaches", that is what (among many things) Ramón Fernández taught me in his Methodology of Economics lectures. There are so many amazing issues to investigate, so why spend time pointing out the failures of the others?
That is why I think that the debate that top econ bloggers are involved is utterly boring. In fact, I do not why I've written this post...

Friday, May 25, 2007

V Meeting of the Brazilian Regional Science Association

It will take place in Recife next October (link in Portuguese). The deadline for sending abstracts is June 30th and papers in English are welcomed.

Thursday, May 24, 2007

"Inequality and Poverty in Latin America: A Long-Run Exploration"

Leandro Prados presented today a paper at the LSE Economic History Seminar . His main conclusion is that inequality changed a lot during the XX century in Latin America. He shows that the bulk of income inequality growth happened after the II World War, therefore the picture of Latin America as immutable unequal is quite wrong. In fact, he shows that inequality in Latin America followed a trend similar to Spain until the sixties, afterwards when their paths diverge.
(Click in the image above and you will see a clearer graph).

Wednesday, May 23, 2007

World at Night

This picture resembles the Economic Globe and became a visual cliché. However, there are two issues that are relevant to point out:
- People (and development) are clustered near the coast of the continents;
- Countries do not exist, only regions. I guess that Jane Jacobs,Michael Storper and Paul Krugman would agree with this assertion.

Tuesday, May 22, 2007

Ken Sokoloff

Kenneth Sokoloff passed away today. He was a distinguished and active economic historian and really friendly.
(By the way, one of the the first posts of this blog was about one of his papers)

King Hong


Monday, May 21, 2007

The Economic Globe

Beautiful. I could stare at it for hours...

Sunday, May 20, 2007


This is the estimated factor of productivity growth of the computing power in two centuries. Yep, William Nordhaus did it again.

Wages and Productivity in Brazil

Renato Colistete has a very interesting paper in the new number of Journal of Economic History. He asks: why wages lagged behind labour productivity in post II War Brazil? His answer is: commies and anti-commies. The unions were dominated by left-wingers and industrialists avoided negotiations. Therefore:
"Brazil never experienced a corporatist accommodation between labor and managers based on shared goals of economic growth and real wage increases tied to productivity.
Instead it witnessed a widening gap between wages and productivity"

I strongly recommend reading the paper! And you should better run because only the most recent number of the JEH is available for free.

Thursday, May 17, 2007

Forget Wolfowitz and ...

... click here. B-Span is the amazing video service of the World Bank. You can watch Acemoglu on growth and institutions, Stiglitz on Brazil's developement, Aghion on Solow's model and so on.

Wednesday, May 16, 2007

Off-topic: Personal Goal # 28281919

Read all the popular science books that have won the Royal Society prize.

Cliometrics in Colombia (and in Brazil)

La Cliometria en Colombia: Una Revolución Interrumpida ia a very interesting this paper by Adolfo Meisel.
I think that a paper about Brazilian Cliometrics would have the same title. By the way, is is intriguing that brilliant researchers like Gustavo Franco, Delfim Netto, Pedro Carvalho de Mello, Claudio Haddad, among others, gave up economic history to pursue other objectives. (The obvious -and legitimate- reason is money, but then we would have to ask why did they choose Economic history in first place).

Tuesday, May 15, 2007

Shipping Containers

Isn't it beautiful? It represents the 75,000 containers that are processed daily in US ports.

Below a detail of the picture:

Source. Via boingboing.

Off-topic: Socks in Winter

Der Spiegel has published an article mocking the British. Among the habits they criticize are:
"The drinking of very much beer in a very short time, going for a walk without socks in winter, the delusion that 42 years after its last win, the national soccer team belongs to a world elite - and, of course, the fact that the Hun is still enemy No 1 - even in the age of Osama bin Laden."

Going for a walk without socks??? What's wrong with that???

Monday, May 14, 2007

Two books suggestions

Making History Count: A Primer in Quantitative Methods for Historians by Feinstein & Thomas is a excellent book for economists as well;

The Practice of History by GR Elton: this is the best non-fiction book without tables, maps and graphs that I've read for a long time. Probably all historians know the book, but for me it was a wonderful surprise. A non quantitative historian writing with wisdom and wit about the methodology and practice of History.

Sunday, May 13, 2007

Slave trade was a Portuguese-Brazilian business

Number of slaves embarked by flag of the carrier ship. Source.

Voyages: the trans-atlantic slave trade database

Excellent news! The fantastic Prof Eltis' database has been expanded and it is on-line and free! The interface is amazing and now the database has information on over 35,000 voyages that disembarked 17.7 million African slaves in the Americas.
A couple of months ago Prof Eltis presented a seminar at the Institute and I thanked him personally, but I must say it again here: thank you and all the researchers that worked in the project!

Saturday, May 12, 2007

Interpretation of interaction terms

In the post about dummy variables the reader Barnabé commented that multiplicative terms in econometric regressions are frequently misinterpreted as well. He suggested this paper on the issue. Thanks!

Friday, May 11, 2007

Joost - Invites

Joost™ the best of tv and the internet
What do you do when you have 2.6 billion dollars? You create Joost. This is the new enterprise of the creators of Kazaa and Skype. It is free and the quality of the image and interface are superb.

I am a beta-tester and I have invites available. Drop me an e-mail or post a comment if you wish to receive an invite.

Claudia Goldin, Dogs and Mothers' Day.

She is one of the top economic historians alive. Her seventies book on the economics of urban slavery is must-read. In the following decades her attention has focused to gender issues. One of her famous papers (with Cecilia Rouse) shows how the institution of "blind" auditions reduced the gender discrimination in the classical music labour market.
Today she criticizes the studies that estimate the wages of a mother summing up the market value of her tasks:
"What about my dog’s annual salary? She guards the house and warms the bed (Al Gore would approve — no electricity used). She cleans the floor — really well — if something spills. She’s my personal trainer and lowers my husband’s blood pressure. She heals as well as heels. Tally up that sum.”
Via Brad DeLong.

Thursday, May 10, 2007

Economics and the Primitive Mind

Anti-immigration and protectionism views are the result of our uneducated primitive brains. Paul Rubin describes the problem and presents the solution:
All humans growing up in a normal environment learn to speak, but reading must be taught because it does not come naturally. Folk economic beliefs are like speech -- we get them without trying. A deeper understanding of economics is like reading -- it must be taught.

Via Greg Mankiw's Blog.

Wednesday, May 9, 2007

Deirdre McCloskey: The Secret Sins of Economics available for free on-line. It is a must read from the best writer Economics has ever had. You should visit her new and complete website . I've never thought that a Microeconomics Reading List could be so insightful and entertaining at the same time.
(If you are reading this blog probably you have heard about her peculiar bio, haven't you?)

II Research Workshop on Institutions and Organizations

Call for Papers. Thanks Ramón.

Windows e Linux

I bought a new notebook last January. It came with Windows XP installed , but I received the right to a free Vista upgrade. After 4 months, several e-mails, phone calls and 10 pounds (hidden delivery charges), I still haven't received the Vista DVD.
A friend of mine used to say that Linux is just for "in the closet" hippies. And as an economist I used to believe that well-defined property rights were essential to innovation. However, after seeing this video of Ubuntu + Beryl and realizing that really smart people have switched to Linux, I think that my Windows' days are counted.

Update: I've just received an e-mail. It says that I will receive the DVD in 3 weeks(?!?!?!?!)

Monday, May 7, 2007

Call for papers

In Eustáquio Reis (IPEA), Moramay López Alonso (RICE) and I are the organizers of the session bellow at the I Congreso Latinoamericano de Historia Económica (Montevideo, December 2007). We welcome papers related to the theme of the session and July 31 is the deadline for sending the abstracts to us. Please feel free to forward this post to whoever you think might be interested in joining the session.
Disparidades Regionales en América Latina: perspectivas históricas

Este simposio reúne trabajos que combinen las perspectivas regionales con estudios históricos y los métodos de análisis espaciales en la búsqueda de explicaciones para los orígenes de las desigualdades regionales en América Latina. Las persistentes y profundas disparidades regionales en los países de América Latina siguen siendo un tema relevante para la investigación histórica. En grades líneas, la importancia asignada a la herencia de las instituciones coloniales vis-a-vis los patrones del crecimiento exportador primario del Siglo XIX o del proceso de industrialización que se consolida en el Siglo XX siguen como cuestiones en abierto. No obstante lo mucho que se avanzó en los últimos años, hay mucho que hacer en términos teóricos, analíticos y sobretodo de calidad de los datos utilizados. En este sentido, el simposio busca explorar las posibilidades de investigación inspiradas por la nueva geografía económica aplicadas a las nuevas bases de datos espacialmente desagregadas. Además de esto, serán considerados estudios que destaquen los aspectos históricos del origen de la diferenciación espacial y desigualdad interna en los países latino americanos.

Income Distribution

In Brazil your are in the top 10% if your annual income is higher them US$5000 a year. And if you earn more than US$23000 you are in the upper 1%. Dani Rodrik shows that is better to be poor in a rich country than rich in a poor country.
Here you can find your position in the world income distribution. Surprised? Don't get sad, things were much worse.

Sunday, May 6, 2007

Stamps, Bad Institutions, and Growth

Until 1855 it was mandatory to stamp every newspaper published in London. I mean: each and every newspaper had to be physically stamped by the Stamp office. Yesterday I went to Somerset House, the place where this absurdity took place.
Maybe Gregory Clark is right after all, good institutions are not essential to economic growth.

Saturday, May 5, 2007

Health and Economic Growth

Arora (2001) convinced me of the role of health in fostering economic growth. This interesting post, points to the Bloom, Canning e Sevilla paper. They estimate that a 10% increase in life expectancy leads to a 0.3-0.4% increment in economic growth.

Thursday, May 3, 2007

Review of Regional Studies - Special Issue

The list of articles in the forthcomming issue of the RRS is quite impressive. James "Spatial Econometrics Toolbox" LeSage" is the guest editor.
  • Arthur Getis Introduction to the Special Issue
  • Sergio J. Rey and Luc Anselin PySAL: A Python Library of Spatial Analytical Methods
  • Daniel A. Griffith Spatial Structure and Spatial Interaction: 25 Years Later
  • Michael Sonis and Geoffrey J. D. Hewings On the Sraffa-Leontief Model
  • Roberto Patuelli, Simonetta Longhi, Aura Reggiani, Peter Nijkamp and Uwe Blie A Rank-order Test on the Statistical Performance of Neural Network Models Regional Labour Market Forecasts
  • Cem Ertur, Julie Le Gallo and James P. LeSage Local versus Global Convergence in Europe: A Bayesian Spatial Econometric Approach

The interpretation of dummies

What is the simple mistake that several great economists made? Halvorsen and Raymond point out that Robert Lucas and Zvi Griliches -among others- misinterpreted the coefficients of dummies in semilogarithmic regressions.
Halvorsen, Robert & Palmquist, Raymond, 1980."The Interpretation of Dummy Variables in Semilogarithmic Equations,"American Economic Review, American Economic Association, vol. 70(3), pages 474-75, June.
The interpretation of a dummy coefficient b is not a change of b*100 in the dependent variable. The correct interpretation is (exp(X)-1)*100. For small values of b there is no problem, but the difference can be quite large.
Mea culpa: Yes, I think that I've made this mistake before. But at least I am in good company.

Wednesday, May 2, 2007


The open source keystroke launcher for Windows. I can not live without it.

The world gets richer and...

... walks faster. In ten years the walking speed has increased by 10%. This is the result of Robert Levine's new study. The opportunity cost of time grew, so we sped the pace. This is the list (in decreasing order of walking speed):
1) Singapore (Singapore); 10.55

2) Copenhagen (Denmark); 10.82

3) Madrid (Spain); 10.89

4) Guangzhou (China): 10.94

5) Dublin (Ireland); 11.03

6) Curitiba (Brazil); 11.13

7) Berlin (Germany); 11.16

8) New York (US); 12.00

9) Utrecht (Netherlands); 12.04

10) Vienna (Austria); 12.06

11) Warsaw (Poland); 12.07

12) London (United Kingdom); 12.17

13) Zagreb (Croatia); 12.20

14) Prague (Czech Republic); 12.35

15) Wellington (New Zealand); 12.62

16) Paris (France); 12.65

17) Stockholm (Sweden); 12.75

18) Ljubljana (Slovenia); 12.76

19) Tokyo (Japan); 12.83

20) Ottawa (Canada); 13.72

21) Harare (Zimbabwe); 13.92

22) Sofia (Bulgaria); 13.96

23) Taipei (Taiwan): 14.00

24) Cairo (Egypt); 14.18

25) Sana (Yemen); 14.29

26) Bucharest (Romania); 14.36

27) Dubai (United Arab Emirates); 14.64

28) Damascus (Syria); 14.94

29) Amman (Jordan); 15.95

30) Bern (Switzerland); 17.37

31) Manama (Bahrain); 17.69

32) Blantyre (Malawi); 31.60

Why NY is not on the top of the list? In the excellent Geography of Time (1998), as far as I remember, Levine says that the congestion on its sidewalks caused measurement bias. By the way, he writes about his experience as a visiting fellow at a Brazilian university (UFF) in the Preface of the book. Funny and true.


The Latin-American and Caribbean Law and Economics Association will hold its XI meeting in Brasília (Brazil).
The guys from my previous blog, the Gustibus, will be there. Great! Take a look at the programme here.

Thanks to Gustibus.

Tuesday, May 1, 2007

Rogoff Versus Wolfowitz

The Wolfowitz 'secret' memo (written by Ken Rogoff).
Via Greg Mankiw.

Vegeratians and Carnivorous

Alvaro Vargas Llosa writes:

"In Latin America, one can speak of a “vegetarian left” and a “carnivorous left.” The vegetarian left is represented by leaders such as Brazilian President Luiz Inácio “Lula” da Silva, Uruguayan President Tabaré Vázquez, and Costa Rican President Oscar Arias. Despite the occasional meaty rhetoric, these leaders have avoided the mistakes of the old left, such as raucous confrontations with the developed world and monetary and fiscal profligacy. They have settled into social-democratic conformity and are proving unwilling to engage in major reform—which is why Brazil’s gross domestic product (GDP) growth is not expected to top 3.6 percent this year—but they signify a positive development in the struggle for modernizing the left.
By contrast, the “carnivorous” left is represented by Fidel Castro, Hugo Chávez, Evo Morales, and Ecuador’s President Rafael Correa. They cling to a Marxist view of society and a Cold War mentality that separates North from South, and they seek to exploit ethnic tensions, particularly in the Andean region. The oil windfall obtained by Hugo Chávez is funding a great deal of this efforts."
Read the whole article here. My view: in broad terms, I do agree with Vargas Llosa Jr. However he forgets that there is a Carnivorous and Vegetarian Right in Latin America as well. The choice in Latin America is usually between a ridiculous left-wing authoritarian populist and an elegant corrupt right-wing plutocrat . Good government is rarely a feasible alternative. Therefore, the cost of opportunity of having a Evo or a Chávez in government is not as high as it seems at first. This is the long nightmare of Latin America.