And still more on Arrow

General equilibrium.

More on Arrow

Here is an excellent post, the first in a series, on Kenneth Arrow's contributions (as well as his character). Based on a link it provides to a paper Ken was working on last year (well into his 90s!), I have to take back my assertion that he didn't seem to have an empirical bone in his body, because here's a paper with N = 130,000!

Apple Park?!

They really couldn't come up with a more creative name for the spaceship?
How about the Apple Pie? The Orchard? The i-O? The Circle Works?

Kenneth Arrow, an appreciation

I've had the privilege of interacting with a number of very smart people over the years. Kenneth Arrow was unquestionably the most brilliant person I ever met. He was my teacher for a third of my first-year graduate micro sequence at Stanford, and I saw him at social gatherings roughly annually since then. In addition to being arguably the most important economist since Keynes, he was good company: charming, funny, and cultured.

There will be plenty of Arrow anecdotes in days to come, and many reckonings of his place in the history of economic thought; the New York Times obituary is a good place to get a sense of just how broad, deep, and influential he was. But I feel compelled to offer a few personal observations.

When I was deciding on grad schools, my advisor at UMass was pushing Stanford. I was interested in radical/Marxist economics, and Stanford was one of the top departments where you could study that stuff in the early 80s. "And of course you know Arrow is there," he said. I really didn't know enough about economics to fully appreciate what he meant. But I went.

First observation: Kenneth was not a great teacher. He taught us general equilibrium theory. (That would be a little like learning relativity from Einstein.) His presentation was adequate, and of course technically accurate. But one sensed he was a little bored teaching foundational proofs he had derived several decades earlier. Late in the term he turned to the optional part of the syllabus, where he had decided to include some material on endogenous preferences and new developments in what would in a few years come to be known as behavioral economics. He became animated. He quoted from The Odyssey. Suddenly we were in the presence of a great mind, working things out for himself, and sharing it with us. Hmm... maybe a great teacher after all.

He was consistently a man of the left, a social democrat (or democratic socialist?). That's a good thing, by the way. He dressed funny. His belt was always up around his armpits. He rode his 3-speed to campus and sometimes forgot to remove his pants clip. He didn't seem to have an empirical bone in his body; as a devoted empiricist myself, this has given me pause on a number of occasions– maybe facts and data are not the same thing...

My favorite Arrow story is from the annual Christmas caroling party we both attended. I pride myself on knowing a lot of the classic Christmas carols, even beyond the first verse. Not bad for a lapsed Unitarian! Kenneth, Jewish, put me to shame. He knew most of the carols by heart, often deep into the third or fourth verse. (How?) His singing voice was not good, to say the least. I will miss him.

Very bad week for the funk

Clyde Stubblefield, Junie Morrison... With Bernie Worrell gone, not to mention Prince, the universe's funkfield has definitely diminished in power this year. We badly need a visit from the Mothership.

Update: How could I fail to provide some "relief"? Here you go. Audio and video quality show their age (nearly 40 years!), but don't you wish you coulda been there? Make sure to hang around for the solos in Part 2... holy crap...

Play "Misty" for Me

It's a tacky song: I never cared much for it. And Quincy Jones was certainly capable of overproducing, as he amply demonstrates here. But there's a reason Sarah Vaughan was called The Divine One. And Zoot Sims knew he was in the presence of divinity when he added his saxophone filigrees. Come to think of it, Zoot had a little holiness in his sound as well. Add the album of the same name to your Spotify list; you need more Sarah in your personal soundtrack.

The Dark Forest

I preferred this sequel to Liu Cixin's The Three-Body Problem to the first installment. Both books are sci-fi on a grand scale, featuring an evolving cast of largely Chinese characters as well as the mysterious and menacing aliens who have left their own doomed solar system and are en route to colonize earth and presumably exterminate humanity. What makes The Dark Forest a better book? Partly the translation from the Chinese, in this case by Joel Martinsen, which is more fluid and vivid than Ken Liu's competent but dry version of The Three-Body Problem. But I also found more compelling the story of Luo Ji, the unconventional hero of this tale. A dreamer, he conjures a love for himself, and a spell to save the world. Can they become reality?

The Umbrellas of Cherbourg

We watched this masterful 1964 French musical last night. All the dialogue is sung, which is impressive, and the music by Michel Legrand features many familiar and lovely melodies. The plot revolves around a love affair and the unplanned pregnancy of a young single woman, played by Catherine Deneuve. The pregnancy is treated matter-of-factly, something you couldn't possibly imagine in an American film of the same period. The movie is a riot of colors; the current release was restored from three black-and-white separation masters ordered by the director, Jacques Demy.

Umbrellas was clearly an inspiration for La La Land, but unlike the latter film, which suffers from sluggish pacing in parts, Umbrellas sweeps the viewer along from start to finish. The jazzy score and recitative dialogue, along with the swirl of vivid colors, constantly delight the ears and eyes. As for the charming couple and their ill-fated romance... well, they're nice too.

Three killer graphics from Raj Chetty

Click your way over to his web site, The Equality of Opportunity Project, and spend some time exploring. Here are three of my favorites... you'll find your own.

1. You grew up poor: Your parents earned an income at the 10th percentile of the national income distribution. Across the tracks, your unlikely friend grew up rich, at the 90th percentile. You're both now in your mid-20s... How's it going? If you are typical, given your humble origins, you've had to work hard, but you've made out OK: your income is nearly at the 40th percentile– on the low side of middle class, but you've escaped poverty. Your friend, meanwhile, had many advantages in life, and not surprisingly she's doing better than you are: slightly above the 60th percentile. But materially, at least, the income divide of your childhood has narrowed substantially.

We know from comparative studies that intergenerational mobility in the United States is actually lower than most other developed economies. The playing field is not level: the circumstances of one's birth matter a lot here. But on average, maybe not as much as I had thought.

2. But wait a sec. "On average," I said. Average obscures a lot of variation. And in the United States, Chetty et al have shown, a lot of variation is associated with place. In this map, the colors show where you ended up in the income distribution, having been raised in a family at the 25th percentile. Darker means you were less likely to escape your humble origins. In the prairie states, you probably made it to middle class... If you came from the "black belt," or "the rez," you probably didn't do much better than your folks. Opportunity, like the map, is color-coded in America. The underlying data here, by the way, are adjusted for local cost of living. That adjustment only really matters in high-cost places like the Bay Area, which offers less upward mobility than we'd like to think.

3. So if you're living in one of those dark red zones, maybe you should grab the kids and move to a lighter place on the map. Will it help them grow up more prosperous? Indeed, and they gain for every additional year they're there. Meanwhile, our democracy might work harder figuring out how to equalize the numbers.

Trump tax reform best case scenario?

From John Cochrane's blog. I'd give it this side of a snowball's chance in hell.

Kotlikoff's preferred tax plan... a) eliminates the corporate income tax, the personal income tax, and the estate and gift tax, b) introduces a value added tax (VAT), a progressive personal consumption tax on top consumers that exempts consumption financed by labor income, an inheritance tax that kicks in after the receipt of $5 million, and a Co2 emissions tax of $80 per ton, c) eliminates the ceiling on the FICA payroll tax, and d) provides a $2,000 annual payment to each U.S. citizen.