At #MarkusAcademy we had @MITEcon Daron Acemoglu @DAcemogluMIT to discuss his new book with Simon Johnson @baselinescene: “Power and Progress: Our Thousand-Year Struggle Over Technology and Prosperity.” A thread with the highlights 👇👇1/6
ilp.mit.edu/node/59183 Their book coins the term “The Productivity Bandwagon”: the idea that technological progress will always lift all boats. Economists tend to think this way: as firms try to hire more workers, they will increase wages. However, history suggests the bandwagon is not guaranteed 2/6

Kevin Bryan's "User Guide to LLM and GPT for Economists"


Summary thread: 6 takeaways: (1) Controlling the output of LLMs is difficult,
(2) the “Raw” ChatGPT online is far from state of the art,
(3) hallucinations are mostly fixable,
(4) the technology' rate of improvements is fast,

#GameStop stock price rise and volatility:

#shortsqueeze is a special form of Predatory Trading (see my paper @JofFinance with Lasse Pedersen)
people.stern.nyu.edu/lpederse/paper…

Historical short squeezes Some more historical short squeezes are

- 1901 Northern Pacific Railroads
- 1923 Piggly Wiggly  [read great twitter thread by @dollarsanddata ]
- 1980 silver short squeeze by Hunt brothers
- @Volkswagen (attempted takeover by Porsche)

The Fed took aggressive action today to prop up U.S. businesses, but these policies won’t necessarily reach small and medium-size enterprises (SMEs). This is a thread on why and what could help. Our latest proposal focuses on SMEs: scholar.princeton.edu/markus/news/co… The Fed’s usual “capital markets approach” doesn’t reach SMEs. Most small business funding relies on banks and trade-credit (FinTech covers only 10%), and most SME loans are not securitized and traded, but held to maturity and not traded on the secondary market.

🦠#CoronaCrisis crisis & European Economy: (1/6)
What's good for 🇩🇪Germany, should be good for 🇪🇺Europe
German initiative of
(a) Kurzarbeit (gov. covers part of wage bill) [transfers to firms/workers] and
(b) Liquidity bazooka = low-interest credit for debt re-payment (2/6) Credit is granted to firms by (national) fiscal authority for x, say 7, years.
Why tax authority? Tax authority can enforce repayment (together with tax collection) + senior of credit status for gov. => limits credit risk
(credit is as safe as 'tax credit')