Let's talk about France ...

France is not doing so bad (in the short and long term), according to Krugman:

More On Not-So-Miserable France

Following up a bit further on my earlier discussion. The French economy gets extraordinarily bad press in this country, and this attitude spills over into some allegedly serious economic analysis too. I don’t have time to dig up examples now, but not that long ago quite a few investment banks etc. were pegging France as the next crisis country, about to go the way of Italy or even Portugal any day now.

And there was actually a spike in French borrowing costs for a while. Here’s the France-Germany long-term interest differential:

You can see the surge from mid-2011 to mid-2012. In retrospect, however, it’s clear that this was a De Grauwian liquidity panic, arising from the fact that France didn’t have its own currency and that it wasn’t clear whether the ECB would act as a lender of last resort. Once the ECB sorta kinda indicated that it would, in fact, do its job, the panic subsided, and France is no longer under severe financial pressure.

True, there’s still a French premium, which may reflect some lingering solvency concerns. In reality, however, France does not have a large structural deficit. And while it has an aging population, the demographic problem is actually much less in France — with its relatively high fertility — than in the rest of Europe, Germany in particular.

But hasn’t the French economy performed poorly in the crisis? Yes, compared with the United States or Germany. But it’s not in the crisis camp, at all. Here’s a comparison:

Most people, I suspect, think of the Netherlands as being like Germany — doing fine thanks to stern fiscal virtue and all that — while those self-indulgent French slide into economic decline. Actually, France and the Netherlands have basically the same performance.

Just to be clear, I’m not saying that all is well with France. France is doing badly; so are we; so is almost everyone. The widespread notion that France is in big trouble is, however, not based on reality. And it’s hard to avoid the suspicion that it’s ultimately political: with their generous welfare state the French are supposed to be collapsing, so people assume that they are.

Jane Austen, Game Theory and (unrelated) Genetic Tests

Let me flag two recent episodes of the podcast Freakonomics:

- One where we learn that Jane Austen was an (early) Game Theorist. This the subject of the book by Michael Chwe. On a personal note, I have much appreciated the reference by Chwe in the podcast to my good friend Marek Kaminski.

- Another where people are asked "Do you really want to know your future?" Genetic tests can now give you very precise information on your probability of developing a specific disease (for instance, Huntington's). This is an area to which I have recently contributed, together with David Bardey from Bogota, in a paper forthcoming in the Journal of Health Economics. As in the podcast, we look at the circumstances under which individuals do take a genetic tests. We plan to study the "preference for ambiguity" described in the podcast in future research.

Point of Inquiry - Steven Pinker - The Decline of Violence

Another podcasts series I like to listen to is produced by Point of Inquiry.

Point of Inquiry is the Center for Inquiry's flagship podcast, where the brightest minds of our time sound off on all the things you're not supposed to talk about at the dinner table: science, religion, and politics.

Guests have included Brian Greene, Susan Jacoby, Richard Dawkins, Ann Druyan, Neil deGrasse Tyson, Eugenie Scott, Adam Savage, Bill Nye, and Francis Collins.

My recent favorite is a discussion with Steven Pinker on his latest book, The Decline of Violence.

If you want to save time, you can concentrate on minutes 8 to 14 of the podcast (you can view the interview on youtube here) for a list of the 5 main reasons violence has declined in our societies, according to Pinker.

Hint to economists: his explanations involve prisoner dilemma game theory...

Are Stradivarius violins up to their reputation?

A few posts about podcasts, starting with a Skeptoid episode on "Secrets of the Stradivirius".

Skeptoid is a weekly science podcast dedicated to furthering knowledge by blasting away the widespread pseudosciences that infect popular culture, and replacing them with way cooler reality.

Each weekly episode focuses on a single phenomenon — an urban legend, a paranormal claim, alternative therapy, or something just plain stupid — that you've heard of, and that you probably believe in. Skeptoid attempts to expose the folly of belief in non-evidence based phenomena, and more importantly, explains the factual scientific reality.

The episode on Stradivirius is especially interesting when it reports a "double blinded" study comparing ancient (including Stradivarius) and modern instruments, played and listened to by professional musicians. The results strike a chord with me, since they once more show our culture's obsession with the supposedly very top of the distribution (of violins in this case) ... Read the transcript or listen to the podcast to see what I mean.

Au fil de l'histoire - Nikola Tesla

J'aime l'Histoire en général et je suis un fan de l'émission "Au fil de l'histoire" sur France Inter. Chaque semaine, un nouvel épisode (accessible en podcasts) choisit un thème, un événement ou un personnage et le décrit sous forme de pièce radiophonique d'environ 30 minutes.

J'ai beaucoup apprécié la description de la vie de Nikola Tesla, un chercheur du début du XXème qui a fait beaucoup de découvertes dans le domaine de l'électricité et de l'automatisme, notamment. On y décrit très bien ses interactions avec Westinghouse et Thomas Edison, et notamment les aspects et conséquences économiques de ses inventions.

Toujours dans le domaine scientifique, je recommande également L'affaire Lyssenko ou l'intelligentsia parisienne en délire.

Revival of the silk road

[Long delay since the last posting - this has been conference season. I hope to get back to a more regular posting schedule from now on...]

Here is Paul Krugman's take on this most interesting article in the NYT on the increase in train freight from China to Europe, along the Silk Road. Economic geography & Industrial Organization put together!

The New Railway Age

I’m surprised that the econoblogosphere hasn’t taken much notice yet of Keith Bradsher’s interesting piece on the revival of the Silk Road — now not consisting of camels carrying Chinese silk, but of huge freight trains carrying Chinese electronics.

But really, if you’re interested in globalization, this should be of great interest. Transportation technology matters, a lot; container shipping revolutionized the world.

And the revival of trains is an interesting story. In the United States, freight rail bottomed out in the 1970s, and has since been carrying a rising share of ton-miles — around 40 percent these days. Now it’s starting to play a role in long-distance international trade.

It comes down, of course, to time and money. Air freight is expensive, especially in what is looking — despite fracking — like an era of sustained high fuel costs. So, to a lesser extent, is trucking, which in any case isn’t a realistic option for long-range international trade. Shipping is cheap but slow. So there’s an important niche for rail — a niche that probably hasn’t been fully exploited, because people forgot for a while about a technology that seemed old-fashioned.