Swimsuit competition, Russian border guard edition

Apparently Saturday was Russian Border Guard Day, something I didn’t know existed.  And they celebrated in style:

Russia Border Guards Day

Former Russian border guards bathe in a fountain in the Gorky Park, as they celebrate the Border Guard’s Day, in Moscow, Russia, on Saturday, May 28, 2016. (AP Photo/Ivan Sekretarev)

Screenshot 2016-05-31 07.18.29.png

When you are hired with the agency, do they issue you an official bathing costume too?  If so, I think the guy on the left didn’t get the memo (although he did get the hat!).

Anti-corruption maracas

The Guardian published an article yesterday titled “Mexico City mayor ridiculed over plan to fight sex crimes with plastic whistles.”  Mexico has a real problem with sexual assaults and a lot of them occur on public transportation every year.  The Mexico City government has dealt with the situation by running “a fleet of pink buses only for female passengers, along with women-only carriages on the subway system.”  It’s estimated that 94% of sex crimes are not reported, giving an idea of how much victims trust the system.


The whistle proposal has been roundly criticized.  Critics accuse the mayor of “patronizing women instead of tackling men’s boorish and criminal behavior.”  The response on social media has been especially humorous:




A Peoples’ QE: Hungarian Style

You know how our US QE went to big banks and they just sat on it because the Fed paid them too?

Didn’t you hate that?

Me too.

Luckily Hungary provides us with a great blueprint for a true “Peoples’ QE”

“Gyorgy Matolcsy is rewriting the rules for central banking inside the European Union to include family and friends.  Since being tapped to run the National Bank of Hungary by Prime Minister Viktor Orban three years ago, the former economy czar has funneled the equivalent of almost $1 billion to six foundations he set up over the objections of his supervisory board and to the irritation of EU officials.”




When asked for comment, PM Orban said, “Checks and balances are a U.S. invention that for some reason of intellectual mediocrity Europe decided to adopt,”

Ah yes, the USA where the Magna Carta was signed in 1215 (I believe it was in Dallas)!

So people, when people ask you why does our Fed have to be such a stick in the mud?, you can answer, “intellectual mediocrity”/



Behavioral Economics meets The Carpenters

People, Richard and Karen committed a lot of logical errors in their songwriting. Thankfully Twitter is here to break them down for us!




A funny thing happened on the way to the new version of the Penn World Tables

People, a wise one of you once said, “If it ain’t broke, don’t fix it”.

Sadly it appears that this principle was not followed in the “upgrade” of the PWT to versions 8.0 and 8.1. At least according to this NBER working paper by Pinkovskiy and Sala-I-Martin.

They use satellite measures of nighttime lights as a measure of true income. They assume that these measures are correlated with true income and that the measurement error in the satellite method is uncorrelated with the measurement errors in the PWT methods. They then evaluate different versions of compiled datasets on how well they explain the satellite measure.

They report that, “in particular, we find that the PWT 7.1 chain-based GDP series substantially outperforms the constant-price series in both PWT 8.0 and PWT 8.1, the two most recent vintages of the PWT.”


Perhaps even more surprising, they find that, “the World Development Indicators are as good, and often better, measures of unobserved true income as are any recent vintages of the Penn World Tables.”


Double ouch!

One reason for this may be that,  “In particular, and again unlike the PWT, the WDI take national growth rates directly from the national accounts without any further editing, while the PWT performs some editing of the growth rates before using them.”

The paper also has a fascinating discussion of what approaches are better for measuring cross-country income differences versus producing comparable measures of country growth rates, along with a discussion on possibly average different measures in a way to produce an overall more accurate estimate.



Tyrone on Brexit

People, I just received the following Linkedin message from Tyrone which I reproduce here verbatim (apparently Tyler’s been really cracking down on poor Tyrone):

It’s a good thing Tyler wasn’t an influential blogger back in the 1770s. We’d all still be British subjects.

In 2016 he’s blogging Brexit and unsurprisingly, he’s again come out against change.

The end result he concedes would be good but the path rocky and “the path is everything”.

This from a man who believes the social rate of discount should be zero!

(and, just to hammer on this, if the discount rate is zero, the path is the opposite of everything)

Tyler’s against Scottish Independence, Catalan Independence, Brexit. I somehow feel like he’s even against Grexit (the path! the path!).

Apparently, change is bad.

People, I’m here to tell you Brexit is a no-brainer. The EU is a utility killing machine exponentially ratcheting up dumb regulations while ignoring or actively worsening the real problems that the group suffers. When I solve for the equilibrium I see a place where everything is either mandatory or banned.

Consider refugees as an example of idiotic EU policy.  Now that Kenya and Niger have seen that the EU is paying for poor countries to house refugees, they have quite rationally closed their existing camps and put out a call for bids. Niger has opened by asking for a cool billion or so to keep refugees off Europe’s beaches.

The UK’s per capita income is currently about 2/3 that of the US. They and most EU countries have been falling further and further behind the wealth frontier in the last decades.  The EU hasn’t exactly been a huge success story for them. In the long run, they will do much better on their own (better policies, closer relation to their former settler colonies, less regulatory crushing) and since the social discount rate really should be zero, the path, while perhaps rocky, is temporary while the new equilibrium is rosy and permanent.

Tyrone out.





We are doomed

A. From the always funny FML.com, there is this depressing nugget:

“Today, at Toronto airport, the customs officer checked my passport, then called his colleagues to confirm whether my country, Madagascar, really existed or not. Then, he took a picture of himself with me so he could show his kids that people actually live in their favorite cartoon’s country.”

B.  And speaking of depressing, here is a video of a Saudi family therapist informing men of the best way to beat their wives.  In describing some of the reasons for beatings, it includes such statement like “Unfortunately, some wives want to live a life of equality with their husband.”

C.  And in one of the most unique reasons given for not leaving office at the appointed time, here is Lambert Mende, the Congolese information minister and a “close ally of Mr. Kabila’s, [who] said in a recent interview that the government did not have enough money to hold elections.”

Europe is Doomed! Exorcising Austerity Edition

There’s an old joke that in hell, the cooks are English, the policemen are German,
the mechanics are French, the lovers are Swiss and the bankers are Italian.

But of course we know from recent experience that Italian CENTRAL bankers are less bad than German CENTRAL bankers.

Which makes it very unfortunate that Germany appears to be running a school for Central Bankers!

In related news, some Spanish universities are countering this German move by offering mandatory training in exorcisms.

People, let me get this straight. Germany wants to bring back Austerity and Spain wants to bring back the freakin’ Inquisition? And the best move for the UK is to STAY in the EU?

My advice to perfidious Albion? Get out now. While you can. Run don’t walk.


Phone Call for Janet Yellen!

In the department of “what could possibly go wrong?” we have the following headline: “Zimbabwe is planning to print its own ‘U.S. dollars’”

Shockingly, given the great stewardship of President Mugabe, Zimbabwe is once again facing an economic crisis.  The article reports that “the government is asking for more than $1 billion to feed millions that are in dire need of food aid.”  Things have gotten so bad that the “government is selling wildlife from its national parks to game reserves to scrounge up some cash.” [I know where they could have found at least some of that money without selling wildlife. See here and here.]

Zimbabwe has a checkered history with monetary policy.  In 2008, inflation reached 89.7 sextillion percent a year!  In response, “the country has officially used nine currencies, including the U.S. dollar, the euro, the South African rand, the Indian rupee, the British pound and the Chinese yuan.”

So what’s the plan with printing US dollars?  Perhaps not surprisingly, details are not very forthcoming.  The Central Bank governor claims they will be “bond notes” although it’s unclear why anyone would voluntarily buy a bond backed by the Zim government.  It’s also not clear if they would be identical to US dollars.  If they were, I think Zimbabwe would have an additional problem on its hands!