voluntaryXchange

Carbon Tax Nonsense

The UN shows once again that it is completely divorced from reality or evidence.

From the IPCC report released today:

… IPCC says carbon taxes would need to range from $135 to $5,500 per ton in 2030, $245 to $13,000 per ton in 2050, $420 to $17,000 per ton in 2070 and $690 to $27,000 per ton in 2100.

Folks, the low end estimates in that paragraph are crazy.

They also awarded a Nobel Prize today to William Nordhaus, for his work on the economic costs of anthropogenic global warming.

Note that Nordhaus got the prize, not Stern. Stern is the author of a famous UK report, which used economically questionable assumptions to come up with an optimal tax of about $100/ton.

Policymakers loved that one, but economists complained that $40/ton was what you got with assumptions that few complained about.

The low end UN number for 2030 is 200% higher than that, and the high end is … 14,000% too high.

I’m sorry. They’re liars, and they just made that up.

It will be interesting to see which gets more news coverage, Nordhaus or the UN.

A Nobel for Ray Fair?

You’ve got to think that after Trump’s stunning upset — at 9:30 EDT the betting markets still had Clinton winning — that the Nobel Committee can just give Ray Fair his prize right now.

Tyler Cowen noted this back in September, and I was dubious.

Fair did the seminal work on predicting elections with macroeconomic variables.

And Fair’s economic model has been predicting a Republican victory for 24 months.

Technorati Tags: election,2016,ray,fair,nobel

A Second Night of Bob Dylan

Pure navel gazing here …

Yesterday I mentioned that I was introduced to Bob Dylan by Gary Storm’s radio show in 1981. I listed out some of the songs I heard for the first time.

But it was a two night show. The second night introduced me to: The Ballad of Frankie Lee and Judas Priest”, “John Wesley Harding”, “Dear Landlord”, “I’ll Be Your Baby Tonight”, “I Threw It All Away”, “Lay Lady Lay”, “One More Night”, “If Not for You”, “Forever Young”, “On a Night Like This”, “Lily, Rosemary, and the Jack of Hearts”, “People Get Ready”, “This Wheel’s On Fire”, “One More Cup of Coffee (Valley Below)”, “Is Your Love In Vain?”, “Señor (Tales of Yankee Power)”, “I Believe In You”, and many others.

Thirty-five years later I still marvel at the importance of that one show in my life.

Technorati Tags: bob,dylan,nobel,literature,gary,storm,oil,dog

Dylan Selection Quote

David Remnick:

What an astonishing and unambiguously wonderful thing! There are novelists who still should win … but, for all the foibles of the prize and its selection committee, can we just bask for a little while in this one? The wheel turns and sometimes it stops right on the nose.

Via The Guardian.

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Best. News. Ever.

OK. That’s an overstatement. But I am immensely pleased that the Nobel Prize in Literature has been given to someone worthwhile: Bob Dylan.

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I have posted before about my introduction to Bob Dylan. It was a huge day in the life of this teenager. You know, a religious experience with a >small r”.

It was on cold, wet, night that followed a dim day — early Spring in the Buffalo suburbs in 1981.

And there was an eclectic late night radio show out of Niagara Falls called something like Gary Storm’s Oil of Dog Show.† I think he had an all night shift playing classic rock, but for this show he got to do whatever he wanted. Usually for an hour, but it didn’t have a set limit.

One night I heard the commercial for that evening’s show, and I liked one of the song clips. So around 11:30 I hit record on a vintage reel-to-reel tape deck, and listened in until I fell asleep.

What was played was a selection of songs, chosen from albums going chronilogically, spread over 2 nights and 4 hours. Commercial free too.

Dylan was very out-of-style at the time. He had gone Christian, and his music wasn’t that great. I can’t say I knew any Dylan songs specifically before that night. But I was introduced to: “Song to Woody”, “Talkin’ New York”, “Ballad of Hollis Brown”, “Blowin’ In the Wind”, “A Hard Rain’s a-Gonna Fall”, “The Lonesome Death of Hattie Carroll”, “Masters of War”, “One Too Many Mornings”, “Only a Pawn In Their Game”, “The Times They Are a-Changin’”, “When the Ship Comes In”, “With God On Our Side”, “I Shall Be Free No. 10”, “Motorpsycho Nitemare”, “Bob Dylan’s 115th Dream”, “Maggie’s Farm”, “Mr. Tambourine Man”, “Like a Rolling Stone”, “It Takes a Lot Laugh, It Takes a Train to Cry”, “Visions of Johanna”, and all that was on the first night.

What followed was maniacal purchases of almost every Dylan album from a used record store down on Main Street. And I’m still grateful to CA for giving me his cassettes of Budokan (lots of people hate that album, but I played it a ton in the early 80’s).

† The latest incarnation of the show runs on internet radio LKCB.

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My Nobel Predictions

The prize in economics comes out on Monday morning. Like many, I’ve failed miserably at predicting winners, so now I’ll just give you my wish list. I’d be happy with any one of these: Bhagwati, Nordhaus, Baumol, Demsetz, Harberger, or Paul Romer.

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Selten and Subgame Perfect Equilibrium

Reinhard Selten passed away last week. He shared the 1994 Nobel Prize for developing the idea of subgame perfect equilibrium.

As a professor, I am always on the lookout for good examples of subgame perfect equilibrium, because it’s a fairly hard idea to teach. The obituary got me off looking at Wikipedia, and I found an example of a game that is both good and accessible there.

I won’t copy it over here, but the game is a two stepper: one player chooses their strategy, followed by the other. Each has 2 choices, so there are 4 possible outcomes.

The cool thing about the example is that it has 2 Nash equilibria, but only 1 of them is subgame perfect. Further, the explanation sets out the extensive form, but then also shows the outcomes in a matrix (which in my experience is easier for students to use to find Nash equilibria).

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This Year’s Nobel Predictions

The economics Nobel will be announced in less than 24 hours. I’ll just repeat my standard list of candidates at this point.

I think it’s going to be Nordhaus. Now that the IPCC has issued another report, and is starting to sound a little more conciliatory, perhaps they’ll give the prize to the grown-up in that room.

I’d still like to see Bhagwati, but I think that train was diverted before it could even leave the station.

And we lost Alchian this past year. Pity.

If you’re interested in my past predictions, you can check my Nobel Prize category.

Technorati Tags: 2013,nobel,prize,economics,predictions

WTF: Nobel Peace Prize Edition

Chemical weapons are used on civilians on a scale not seen in a couple of decades … and the Nobel Peace Prize committee gives the award to a group that’s a watchdog on chemical weapons.

Yep, they watched them being used alright.

Hey morons: using the weapons isn’t peaceful.

Yet, they’re literally making the claim that cleaning up the weapons (the bad guys admit to having) after they’ve used them promotes peace.

This is like claiming that when a hit man executes someone, and leaves the gun on the ground, that the person who picks up and disposes of the gun is important because they don’t have an NRA sticker on their car.

Excuse my language, but what a bunch of a**holes.

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2011 Economics Nobel Laureates

It’s Sargent and Sims. Barro has got to be steaming.

I didn’t make any predictions this year (it was too embarrassing for me after the last two years).

But both Sargent and Sims were on my A list when I made predictions in 2009, 2008 2007, 2006, and 2005. I thought they might get the award as a pair, but I was more inclined to think that Sargent would get it with Barro, and Sims would get it with Hansen.

As a macroeconomist who’s done both applied and theoretical work, Sargent and Sims are two of the gods in my pantheon.

Now I know for sure that all the hours I spent reading Sargent (starting in 1985) and Sims (starting in 1988) were worth it.

This is proof positive that the positions they took — that we really didn’t know much at all about the relationships between macroeconomic variables — in  those old Federal Reserve Bank of Minneapolis and Carnegie-Rochester conference proceedings (pretty much the most important proceedings I ever heard of) were right.

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