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Ben Golub Profile picture
@ben_golub
Sep 8, 2020 • 4 tweets • 1 min read • Read on X
Haven't been this proud of an acknowledgment in a while! (see next tweet) Image
Image
paper at economics.mit.edu/files/20281
h/t: I learned about the font from @kottke

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More from @ben_golub

Ben Golub Profile picture
Oct 12
This terribly misguided paper is making the rounds.

This thread is to make it common knowledge what is wrong with it.

The basic thing: all modern economic theory allows for a gap between individual maximization and efficiency, whatever you mean exactly by each of these.

1/
The first welfare theorem (individual optimization implies social efficiency) breaks down in the presence of frictions -

e.g., incomplete markets, asymmetric information, externalities, and market power.

Most economics today is about these frictions.

2/
Now, the paper has some halfhearted recognition of this, but says, effectively

"Well, you know, there is some meta-stage in which institutions are chosen, and economics assumes that this choice will be made to kill all frictions except the efficient ones."

3/
Read 7 tweets
Ben Golub Profile picture
Oct 4
this long post is an interesting document!

a few notes on it from an economist studying network theory

The striking thing about César's hit 2009 paper on economic complexity is that it doesn't mention eigen-anything and seems surprisingly disengaged from network theory.

1/
The economic complexity index that Hidalgo and Hausman propose in "The building blocks of economic complexity" is a very close variant of Kleinberg's very famous 1999 HITS algorithm.

It's not clear whether they're aware of this connection, but in any case

2/ Image
economists writing about networks in 2009, such as Jackson, Acemoglu, myself, and many others would have probably written the paper differently --

with a clearer consciousness to our big debt to the prior study of eigenthings as centrality measures!
Read 10 tweets
Ben Golub Profile picture
Sep 28
I was expecting to hate Tim Hartford's piece, which essentially says that the math in economics "feels wrong" for the subject.

But I liked it! He's right. Today's economics does invest a lot of its mathematical effort in the wrong stuff.

Thread 1/
To take an example from the graduate curriculum, we spend a lot of time dealing with fixed points in large models (dynamic, stochastic, etc.)

But most students taught our toolbox could say nothing useful about how to model whether agents can find these equilibria.

2/
Some famous work in computer science, e.g. by Daskalakis and Papadrimiou, has studied the complexity of finding equilibria in games and markets.

But economics has not absorbed much from the methods or concepts used in this work, and has mostly shrugged off the whole thing

3/
Read 8 tweets
Ben Golub Profile picture
May 7
Report from the teaching trenches:

I teach an advanced elective (Social and economic networks) which is difficult for top undergrads but where AI can do the homework perfectly.

The main changes this year:
(i) I encourage AI use for learning;
(ii) closed book exams

1/
I don't care at all about homework being done with AI since most of the grade is exams, so this takes out the "cheating" concern.

Students seem motivated to learn and understand, which makes the class very similar to before despite availability of an answer oracle.

2/
It's possible that (A) all the skills I'm trying to teach will be automated, not just the problem sets AND (B) nobody will need to know them and (C) nobody will want to know them.

Notice: A doesn't imply B and B doesn't imply C.

3/
Read 10 tweets
Ben Golub Profile picture
Apr 7
If you'd like to read or teach about the new economics of supply networks and their fragility this spring (see quoted thread for an application)...

a short list of resources you might find useful that make a natural unit in a syllabus.
A survey of what standard models of production and trade are missing, and how network theory can illuminate fragilities like the ones unfolding right now, where market expectations seem to fall off a cliff.

bengolub.net/fragilitysurve…Image
A survey by the fantastic @DBaqaee and Rubbo on how network macroeconomics integrates rich propagation mechanisms into core models.

Read this for models you can take to the (local central) bank.

annualreviews.org/content/journa…Image
Read 6 tweets
Ben Golub Profile picture
Apr 4
The main effect of tariff insanity:

Uncertainty poisoning supply networks, degrading a lot of relationships at once.

That scar tissue will linger for a long time.

1/
Recently Yann Yann Calvó López and I wrote two posts on @Noahpinion where we detail how vulnerable modern supply networks are.

A trade war triggered by Trump's chaotic tariffs is the same type of aggregate shock as the Covid crisis, but worse.

2/
noahpinion.blog/p/americas-sup…
@Noahpinion Look at the structure of modern supply networks, with most sourcing relationships crossing borders.

Most of these relationships operate on low margins, and big tariffs will shut some of them down.

3/ Image
Read 8 tweets

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