This podcast episode was originally posted on March 24th, 2017.
Returning to the podcast is Vincent Geloso of Texas Tech University.
Our topic for this episode is anthropometric history, the study of history by means of measuring humans. Doing serious historical research into the distant past is difficult work, because the further you look back in time, the less information you can access. For the 20th century we have wonderful thing like chain-weighted real GDP. Going back further, we have some statistics, lots of surviving physical evidence, and loads of documents and writings. Going further than that, we’re left with the odd scrap of thrice-copied surviving manuscripts and second-hand accounts from people who lived centuries after the events they describe. And going even further than that, we have just bones and dilapidated temples with the occasional inscription.
Anthropometric history allows us to look into the distant past at what economic historians like Vincent hope might be a good measure of different populations’ health and standards of living: their heights. People who have healthy upbringings with lots of access to food tend to be taller than people who don’t; that’s why modern humans are much taller than they were a thousand or even a hundred years ago.
Vincent has contributed to this literature with his latest co-authored paper, The Heights of French-Canadian Convicts, 1780s to 1820s. The abstract reads as follows:
This paper uses a novel dataset of heights collected from the records of the Quebec City prison between 1813 and 1847 to survey the French-Canadian population of Quebec?which was then known either as Lower Canada or Canada East. Using a birth-cohort approach with 10 year birth cohorts from the 1780s to the 1820s, we find that French-Canadian prisoners grew shorter over the period. Through the whole sample period, they were short compared to Americans. However, French-Canadians were taller either than their cousins in France or the inhabitants of Latin America (except Argentinians). In addition to extending anthropometric data in Canada to the 1780s, we are able to extend comparisons between the Old and New Worlds as well as comparisons between North America and Latin America. We highlight the key structural economic changes and shocks and discuss their possible impact on the anthropometric data.
Listen to the full episode for our fascinating discussion of this branch of historical research, including the so-called “Antebellum puzzle,” the anomalous observation that American heights decreased in the years prior to the Civil War even though the economy was apparently growing rapidly. We also discuss the heights of slaves in the American South, who were taller than their white counterparts despite being oppress
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https://www.youtube.com/watch?v=UEJGJ0YBfq4
This podcast episode was originally posted on September 9th, 2016.
This week’s episode of Economics Detective Radio deals with the economic thought and continuing popularity of Marx. No, not Groucho! The other Marx!
My guest on the podcast is Phil Magness, a historian who teaches at George Mason University. Phil recently wrote a piece entitled, “Commie Chic and Quantifying Marx on the Syllabus.” Recently, the Open Syllabus Project released a data set including thousands of college syllabi. To many people’s surprise, Marx and Engels’ Communist Manifesto enjoys massive popularity!
Phil took a closer look at the numbers and reached some startling conclusions:
1. Accounting for different versions of its title, Marx’s Communist Manifesto appears on a total of 3856 syllabi in the Open Syllabus Project database. That makes it the second most used text in academia after the popular writing style manual by Strunk and White (3934 syllabi)—a book that’s usually assigned to help college students with their composition habits for writing term papers.
2. Of those 3856 Communist Manifesto hits, only 103—or 2.67%—are on syllabi in Marx’s own primary academic discipline, economics. The rest are in fields that venture far astray from economics, with the highest concentrations coming from the humanities.
3. Marx’s Communist Manifesto far exceeds the syllabus frequency of virtually *any* other author or work in all of human history with the possible exception of Plato. Here are the rankings for Marx and the most cited work of several major philosophical figures on the list (note: I intentionally excluded works that are textbooks or primarily literary and paired down the tail end of the list to give a rough sample):
Marx (Communist Manifesto) – 3856
Plato (Republic) – 3573
Aristotle (Ethics) – 2709
Hobbes (Leviathan) – 2671
Machiavelli (The Prince) – 2652
King (Letter from the Birmingham Jail) – 1985
Mill (On Liberty) – 1969
Foucault (Power) – 1774
Darwin (Origin of Species) – 1701
Augustine (Confessions) – 1694
Tocqueville (Democracy in America) – 1650
Smith (Wealth of Nations) – 1587
Rousseau (Social Contract) – 1427
Rawls (Theory of Justice) – 1248
Sartre (Existentialism) – 1224
Paine (Common Sense) – 1128
Locke (Second Treatise) – 1045
What could account for the popularity of The Communist Manifesto? Phil identifies two hypotheses: First, it could be the case that Marx simply is the most important thinker who has ever lived, beating out all but Plato by a wide margin. Second, Marx could be enjoying outsized popularity because university faculty outside of economics are overly enamoured with his thought.
The latter seems like the truth.
While Marxian thought does dominate some corners
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https://www.youtube.com/watch?v=KdzOLGn0cgs
This podcast episode was originally posted on August 15, 2014. The original show notes follow.
In this episode, James Caton discusses the classical and inter-war gold standards. James is an economics PhD student at George Mason University.
Gold has many qualities that make it an ideal money: It is valuable, scarce, divisible, and easy to transport. It is also easy to verify the value of a given amount of gold: The Old Testament references weights and scales being used to measure gold. Ancient people could verify the purity of the gold by observing its water displacement.
Before 1870, only Great Britain was on a gold standard, while gold, silver, and other metals would circulate freely alongside one another throughout the rest of Europe. The classical gold standard began in the wake of the Franco-Prussian War, when the victorious Germany demonetized silver in favour of gold and the rest of Western Europe followed suit (see Caton on the deflation that resulted from the demonetization of silver, http://papers.ssrn.com/sol3/papers.cfm?abstract_id=2330059). America converted to the gold standard in 1879 upon redeeming the Civil War greenbacks for gold.
The classical gold standard operated as a fixed exchange rate regime. As England was the center of global finance, the Bank of England held a privileged position whereby other central banks would follow the Bank of England to keep their currencies constant against the Pound Sterling (see Eichengreen and Bordo, http://www.nber.org/papers/w8716). This was the case until the First World War.
Europe’s governments suspended the convertibility of their currencies into gold during the First World War. These governments created a great deal of inflation to finance the war, but they were reluctant to devalue their exchange rates after the war had ended. They wanted to return to their pre-war exchange rates.
At this point, the Fed did something crazy: It slashed the US money stock by over 40%, increasing demand for gold, and causing a general deflation. Before 1925, as gold flowed into the United States, the Fed did not increase the monetary base in tandem with the increasing gold stock, thus sterilizing the gold inflows’ influence on prices. After 1925, when Europe returned to the gold standard, the Federal Reserve did increase the monetary base alongside the gold stock. The typical Austrian narrative about the Great Depression (see Robbins, https://mises.org/books/depression-robbins.pdf, and Rothbard, http://mises.org/rothbard/agd.pdf) blames the Fed for the 1920s inflation that created an unsustainable boom resulting in the eventual crash that became the Great Depression. However, James disagrees with the blame put on the Fed in this story, as the ratio between the base money stock and the gold stock was
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https://www.youtube.com/watch?v=76fskSTyGbw
This podcast episode was originally posted on June 30th, 2017.
http://economicsdetective.com/2017/06/replicating-anomalies-financial-markets-hou-xue-zhang/
In this episode, I have three guests on the show with me: Kewei Hou of Ohio State University, Chen Xue of the University of Cincinnati, and Lu Zhang of Ohio State University.
Kewei, Chen, and Lu have coauthored a paper titled “Replicating Anomalies,” a large-scale replication study that re-tests hundreds of so-called “anomalies” in financial markets. An anomaly is a predictable pattern in stock returns, or stated differently, it is a deviation from the efficient markets hypothesis. Their abstract reads as follows:
The anomalies literature is infested with widespread p-hacking. We replicate the entire anomalies literature in finance and accounting by compiling a largest-to-date data library that contains 447 anomaly variables. With microcaps alleviated via New York Stock Exchange breakpoints and value-weighted returns, 286 anomalies (64%) including 95 out of 102 liquidity variables (93%) are insignificant at the conventional 5% level. Imposing the cutoff t-value of three raises the number of insignificance to 380 (85%). Even for the 161 significant anomalies, their magnitudes are often much lower than originally reported. Out of the 161, the q-factor model leaves 115 alphas insignificant (150 with t less than 3). In all, capital markets are more efficient than previously recognized.
We discuss the process of replicating these anomalies, issues involving the use of equal-weighted vs value-weighted returns, and the problems of p-hacking in finance research.
Works Cited
Hamermesh, Daniel S. 2007. “Replication in Economics.” Canadian Journal of Economics 40(3):715?733.
Kewei Hou, Chen Xue, Lu Zhang; Digesting Anomalies: An Investment Approach. Rev Financ Stud 2015; 28 (3): 650-705.
Hou, Kewei and Xue, Chen and Zhang, Lu, Replicating Anomalies (June 12, 2017). Charles A. Dice Center Working Paper No. 2017-10; Fisher College of Business Working Paper No. 2017-03-010.
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https://www.youtube.com/watch?v=QnQKTJqp_Lw
Today’s episode features my conversation with Mark Blyth, co-author (with Eric Lonergan) of Angrynomics.
Why are measures of stress and anxiety on the rise when economists and politicians tell us we have never had it so good? While statistics tell us that the vast majority of people are getting steadily richer, the world most of us experience day in and day out feels increasingly uncertain, unfair, and ever more expensive. In Angrynomics, Mark Blyth and Eric Lonergan explore the rising tide of anger, sometimes righteous and useful, sometimes destructive and ill-targeted.
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https://www.youtube.com/watch?v=ZdXyGnQ2C6w
This podcast episode was originally posted on July 7th, 2015.
David R. Henderson is a research fellow at Stanford University’s Hoover Institution, and a professor of economics at the Graduate School of Business and Public Policy, Naval Postgraduate School, in Monterey, California.
Thomas Piketty’s Capital in the 21st Century managed to do something unprecedented among equation-dense economic tomes, it became the #1 selling book on Amazon.com. The book tapped in to a hot topic among politicians and the general public: the high (and possibly rising) wealth and income shares of the top 1%. However, David points out that although the book was a best-seller, it wasn’t actually a best-reader. Amazon logs the sentences people highlight, and the top five most-highlighted sentences in Capital all appear in the first 26 pages. It seems that, at least among kindle readers, most people didn’t make it past the introduction. It appears that people buy the book to back up the views they already hold.
David thinks that the huge interest in economic inequality in general and the wealth of the 1% in particular was sparked in the 1990s by politicians, including Al Gore, and picked up by journalists like Sylvia Nasar, before influencing the economics debate. Piketty has been able to ride this wave of public interest at what appears to be its crest.
David distinguishes between inequality of wealth, inequality of income, and inequality of power. Income inequality is the difference in the amount of income we each take in in wages, interest, dividends, and government transfers (e.g. welfare or social security payments), the four main sources of income for most people. Wealth should ideally include the total value of a person’s assets in addition to the stream of income he is likely to earn in the future, though this stream is more often ignored in wealth statistics. Wealth inequality is not the same as income inequality. Critically, since people earn variable income throughout their lives, income inequality doesn’t capture what we think of as the gap between “rich” and “poor.” Retired people who own two-million-dollar homes might have low incomes, but they certainly aren’t poor. Or, to use an example that’s relevant to myself, as a PhD student my income probably sits in the bottom quintile, and yet I can expect a much higher income after I graduate.
The major factor in both income inequality and wealth inequality (measured by current assets and not expected earnings) is age. Teenagers earn little or nothing, but they grow into adults and gain skills and education, their incomes rise, and they gain wealth through savings. Even if everyone had the same lifetime earnings, there would still be significant inequality in any given year since some peop
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https://www.youtube.com/watch?v=595XM9yBlY8