The Impossibility Edition
1. Ken Arrow: Ken Arrow died this week, at age 95. Arrow is the youngest economist to win a Nobel (51), and probably could have won more than once so wide-ranging was his work and influence. He won the Nobel for his work on general equilibrium, but he made foundational contributions to health economics, insurance, risk analysis, and more. Still, he was most famous for his Impossibility Theorem, showing that no majority voting system can be free of arbitrary outcomes. It was also apparently impossible to discuss a subject he wasn't well read in. Here is Tim Harford's short obituary. Here is the Monkey Cage Blog's appreciation ("Arrow proved the existence of a solution to the problem of economics and the non-existence of a solution to the problem of politics."). And here is a three part interview with Arrow from 2009.
2. A Certain Kind of Aid: Speaking of impossible, it's impossible that the combination of subject and price of this new book isn't trolling, isn't it? To be fair, aid does go in cycles, and this was the explicit strategy during colonialism. The item name is a reference to this, if you were wondering. (Hat tip: Justin Sandefur)
3. Pick Your Crisis: Is the next US financial crisis going to come from widespread default on auto loans? Americans now owe $1.16 trillion on car loans, an average of $6000+ per licensed driver. Who is loaning all that money? The car manufacturers; 3/4s of lending to subprime borrowers is underwritten by the manufacturers. Or will the next crisis be the result of the large numbers of Americans who aren't saving for retirement? New data from the US Census Bureau based on tax records finds only 41% of American workers eligible to for a workplace retirement account are using them (another reason why the idea, noted in last week's faiV to make withdrawals from retirement accounts even harder may not help very many people). Or perhaps the next crisis will be based on uncertainty. The Trump administration seems to already be mucking with government statistics. In other words, you should probably lower your expectations of new data insights coming from the Federal government.
4. Household Finance: The Zambia Financial Diaries report is now available. Microfinance Opportunities tracked 355 people for a year in four different parts of Zambia. There are lots of good details here on how households use primarily informal financial services to manage cash flows and smooth consumption. In the US, here's the story of a mother of three in Boston and her weekly financial juggling to make an upwardly-mobile lifestyle on below-local-median-income--it's a mini-financial diary.
5. Mobility and Migration: Here's a piece by Jeff Bloem and Scott Loveridge on the mobility of resettled refugees in the US. Within a year of arrival, more than 10% of the refugees resettled in the US had moved to a different community. The number of refugees in Minnesota doubled because refugees resettled in other states quickly moved again in search of jobs, services and community. They note that there are large differences in the services available state-to-state and that refugees learn this quickly and react to incentives. Which makes it all the more curious that geographic mobility in the United States in general has dropped so much--if refugees can figure out that moving is great path to opportunity in less than 12 months in the United States, why can't everyone else?