Marginal Revolution https://marginalrevolution.com/ Small Steps Toward A Much Better World Mon, 12 Oct 2026 17:11:02 +0000 en-US hourly 1 https://marginalrevolution.com/wp-content/uploads/2015/10/cropped-MR-logo-thumbnail-32x32.png Marginal REVOLUTION https://marginalrevolution.com/ 32 32 42693868 https://marginalrevolution.com/marginalrevolution/2026/10/michael-woodford-nobel-laureate.html?utm_source=rss&utm_medium=rss&utm_campaign=michael-woodford-nobel-laureate Michael Woodford, Nobel Laureate https://feeds.feedblitz.com/~/971276222/0/marginalrevolution~Michael-Woodford-Nobel-Laureate.html https://marginalrevolution.com/marginalrevolution/2026/10/michael-woodford-nobel-laureate.html#comments Mon, 12 Oct 2026 12:20:40 +0000 https://marginalrevolution.com/?p=93979 I think of Michael Woodford as the kind of economist who studies something very specific very intensively and tries to get it just right.  But in his case he is not studying something small and irrelevant, he is studying “monetary policy.” I think of him as the economist who put monetary policy and “monetarism” — […]

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]]> I think of Michael Woodford as the kind of economist who studies something very specific very intensively and tries to get it just right.  But in his case he is not studying something small and irrelevant, he is studying “monetary policy.”

I think of him as the economist who put monetary policy and “monetarism” — broadly construed — back on the map by melding it with modern theory and also modern approaches to expectations.  Think of his monetarism as for a world where interest rates and not the quantity of money are central for central bank policy.  In his world there is some nominal stickiness, and central banks can help to stabilize output without running afoul of the Lucas critique or the other problems with earlier Keynesian approaches.  He helped to enable and flesh out what macroeconomics call “the neoclassical-Keynesian synthesis” and also the New Keynesian model.  His core initial paper came in 1997 with the now-deceased Julio Rotemberg.

Expectations are critical in his model, and you can think of him as an underlying source for approaches to “forward guidance” in the world of central banking.  He also showed how a central bank could (potentially) force its way out of the zero lower bound by “irresponsibly” wishing to inflate.

It is wrong to think of Woodford as “endorsing” nominal gdp targeting, nonetheless he showed it might be optimal and overall his work has encouraged interest in that approach, much-discussed on this blog and elsewhere, most of all by Scott Sumner, a great admirer of Woodford’s.

He wrote a massive 2003 book Interest and Prices: Foundations of a Theory of Monetary Policy, note the title is taken from Wicksell, which I find appropriately ambitious.  His work is extremely careful and precise, and when you read it you get the feeling he has been pondering each individual question for years.

Here is Stockholm on the contributions of Woodford and Hall.  Here is Michael on scholar.google.com.  Here is Alex on Michael Woodford.

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]]> https://marginalrevolution.com/marginalrevolution/2026/10/michael-woodford-nobel-laureate.html/feed 2 93979 https://marginalrevolution.com/marginalrevolution/2026/10/robert-hall-nobel-laureate.html?utm_source=rss&utm_medium=rss&utm_campaign=robert-hall-nobel-laureate Robert E. Hall, Nobel Laureate https://feeds.feedblitz.com/~/971275616/0/marginalrevolution~Robert-E-Hall-Nobel-Laureate.html https://marginalrevolution.com/marginalrevolution/2026/10/robert-hall-nobel-laureate.html#comments Mon, 12 Oct 2026 11:59:30 +0000 https://marginalrevolution.com/?p=93976 Alex has already covered this, I will add a few remarks. First, every Bob Hall paper is interesting!  Only a handful of economists can say the same.  Every paper has an idea, and some sort of novel contribution.  His lesser-known papers can be as thought-provoking as the more famous ones. Here is Bob on scholar.google.com.  […]

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]]> Alex has already covered this, I will add a few remarks.

First, every Bob Hall paper is interesting!  Only a handful of economists can say the same.  Every paper has an idea, and some sort of novel contribution.  His lesser-known papers can be as thought-provoking as the more famous ones.

Here is Bob on scholar.google.com.  You will notice topping the list are important papers on economic growth, even though Bob is best known for his work on the consumption function, where he gave birth to an entire literature.

One of the first Bob Hall papers I studied was his supply and demand analysis with David Lilien.  It is one of the best papers for seeing how Bob approaches every issue by thinking like an economist.

Bob also thought very creatively about how claims about the Solow residual could be translated into isomorphic claims about the gap between price and marginal cost, and for trying to apply that point to cyclical issues.  Bob is one of the best researchers for thinking about the elasticity of supply.

He did much of the core work on the Hall and Jorgensen 1967 (!) tax paper as an undergraduate.

Bob also has important papers on rent-seeking and on looting.

Second, Bob is the greatest commentator on other people’s work of all time.  He is nice and polite, but if he is assigned to your paper beware!  He will find its flaws.  He is also a famously great co-author, before that was established practice.

Third, Bob was part of the production function for Andy Hall, whose work has been covered on this blog much as of late, mostly on AI and economics/social science.  I also just learned there is a connection to Anne E. Hall at Treasury. And there is Jonathan Hall, economist at Uber!

Fourth, Bob has in the past emailed me to correct typographical errors on this blog.  It is the old saying that if you want to get something done, give it to a busy person.

Here is the Nobel committee on the award, noting I find it slightly strange that they made “stabilization” the overall theme linking Bob with Michael Woodford.

An award much deserved…

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]]> https://marginalrevolution.com/marginalrevolution/2026/10/robert-hall-nobel-laureate.html/feed 2 93976 https://marginalrevolution.com/marginalrevolution/2026/10/the-nobel-prize-goes-to-robert-hall-and-michael-woodford.html?utm_source=rss&utm_medium=rss&utm_campaign=the-nobel-prize-goes-to-robert-hall-and-michael-woodford The Nobel Prize Goes to Robert Hall and Michael Woodford https://feeds.feedblitz.com/~/971272304/0/marginalrevolution~The-Nobel-Prize-Goes-to-Robert-Hall-and-Michael-Woodford.html https://marginalrevolution.com/marginalrevolution/2026/10/the-nobel-prize-goes-to-robert-hall-and-michael-woodford.html#comments Mon, 12 Oct 2026 10:06:32 +0000 https://marginalrevolution.com/?p=93973 Twenty-five years ago Tyler told me he thought Robert Hall should win the Nobel. He has been a contender for so long today’s award was a surprise! Hall has an unusual number of unexpectedly creative papers. His best known is on consumption. Start with the textbook Keynesian model: Y = C + I + G […]

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]]> Twenty-five years ago Tyler told me he thought Robert Hall should win the Nobel. He has been a contender for so long today’s award was a surprise! Hall has an unusual number of unexpectedly creative papers. His best known is on consumption.

Start with the textbook Keynesian model: Y = C + I + G + NX. Consumption is the biggest piece of Y and it also depends on Y, so C and Y have to be solved together. The consumption function was the engine of the Keynesian multiplier. The simplest version was C = a + bYd, where Yd is disposable income. Economists estimated b, forecast Y and used the forecast to predict C. Get b, the marginal propensity to consume (MPC), wrong and you get fiscal policy wrong; so a lot of work went into estimating the MPC.

Hall began instead with Milton Friedman’s permanent income hypothesis. Consumption today should depend not just on today’s income but on a consumer’s expected lifetime or permanent income. Hall added rational expectations, so people estimate their permanent income using everything they know. Many economists already accepted both ideas but Hall showed that together they imply something surprising. Consumption should follow a random walk!

Suppose you learn today that you will get a large, permanent raise starting next January. If you can save and borrow, you should start spending more today. When January’s bigger paycheck arrives, it isn’t news. You already knew it was coming.

So information that predicts your income should not predict changes in your consumption. Expected changes in income are already built into your spending plans, and only surprises cause revisions. In the simplest case (quadratic utility, free borrowing and saving, and an interest rate that just offsets impatience) the theory gives

Et(Ct+1 − Ct) = 0

Given what you know today, your best guess for the change in consumption is zero. Consumption moves only on news. Past income or any other variable shouldn’t help predict tomorrow’s consumption once you know today’s consumption.

The key point is that Hall’s test didn’t need a model of how people forecast income. The old consumption functions used things like a distributed lag on past income as a stand-in for expected future income. Hall asked a different question: does anything known today predict the change in consumption tomorrow? He found that the theory was surprisingly correct! Consumption looks like a random walk. Changes in consumption are unpredictable. Later work found consumption somewhat more predictable than Hall’s strict version allows, but the random walk became the benchmark everyone measures deviations from.

The methodological change was enormous. Instead of estimating a relationship between income and spending, economists could test restrictions implied by forward-looking choice. John Cochrane’s account of learning macroeconomics at Chicago describes how deeply Hall’s approach entered the profession’s way of thinking.

This is Hall’s most famous paper but what makes Hall interesting is the number of papers he wrote on very different topics.

Hall was part of the New Monetary Economics–Tyler with Randall Krozner wrote the book on this (alas hard to get) and see also our podcast. Hall’s contribution was a proposal for a commodity standard but not a gold or silver standard. Under a gold standard the price level moves with the relative price of gold, which swings around a lot. Hall’s alternative was to define the dollar as a fixed bundle of ammonium nitrate, copper, aluminum and plywood which he called the ANCAP standard. He chose those four because a price index of the bundle had tracked the CPI closely since the war, so pegging the dollar to the bundle would have come close to stabilizing the cost of living. He didn’t want the government stockpiling fertilizer and plywood. Private arbitrage would keep paper dollars tied to the basket. Hall offered it more as an exploration of what a commodity standard could do than as a policy he was campaigning for. Tyler has said nice things about it. And yes, ANCAP also abbreviates anarcho-capitalism. I assume that’s a coincidence.

Hall’s most famous policy idea is the flat tax, written with Alvin Rabushka at Hoover. Workers pay a single rate on wages above a generous family allowance. Businesses pay the same rate on revenue minus wages, minus purchases from other firms, minus investment, which is expensed immediately. Interest, dividends and capital gains go untaxed at the household level because the business has already paid. Add it up and you have a consumption tax, a VAT that lets workers deduct an allowance so the system keeps some progressivity. Most households could file on a postcard.

Flat tax bills appeared in Congress through the 1980s and 1990s and Steve Forbes ran on it in 1996 and 2000 but we never passed a flat tax. The idea did shape the Tax Reform Act of 1986, which cut rates and broadened the base, but the mortgage interest deduction, the charitable deduction and every other carve-out had a constituency, and the constituencies won. Public choice explains this one pretty well.

Abroad, however, the flat tax took off. Estonia went first in 1994. Russia adopted a 13 percent flat tax in 2001. Slovakia, Georgia, Romania, Bulgaria and a long list of others followed. Post-communist countries were building tax systems from scratch, without decades of entrenched deductions, and with lots of evasion that a simple low rate could reduce. Rabushka keeps the flags of about thirty countries in his Hoover office, although some later backed away.

Most of the foreign versions were flat-rate income taxes. The Hall-Rabushka plan exempted saving and investment, which makes it a consumption tax, and few countries adopted that part. Estonia came closest. It eventually stopped taxing corporate profits until they were paid out as dividends, which is the Hall-Rabushka logic applied to the business side.

Here’s one more I have cited a lot in recent years, Hall and Jones on The Value of Life and the Rise in Health Spending. Hall and Charles Jones offered a strikingly different perspective on rising health care expenditures. Most observers see health care consuming a growing share of GDP and conclude that something has gone wrong. Hall and Jones argued that it might be exactly what we should expect from growing prosperity. Here’s the simple argument. As we become richer, the marginal value of goods and services declines; another car or another vacation matters less, but another year of life becomes more valuable. Indeed, the more goods and services  you have already the more valuable another year of life becomes! It’s better to live more, the richer you are. Thus, their model suggested that it could be optimal to spend more than 30% of GDP on health care by 2050. The United States is the world’s richest large country, why shouldn’t it spend a large share of GDP on enjoying those riches for more years?

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]]> https://marginalrevolution.com/marginalrevolution/2026/10/the-nobel-prize-goes-to-robert-hall-and-michael-woodford.html/feed 17 93973 https://marginalrevolution.com/marginalrevolution/2026/10/michael-woodford-wins-nobel.html?utm_source=rss&utm_medium=rss&utm_campaign=michael-woodford-wins-nobel Michael Woodford Wins Nobel https://feeds.feedblitz.com/~/971275106/0/marginalrevolution~Michael-Woodford-Wins-Nobel.html https://marginalrevolution.com/marginalrevolution/2026/10/michael-woodford-wins-nobel.html#respond Mon, 12 Oct 2026 10:05:58 +0000 https://marginalrevolution.com/?p=93975 No one since Milton Friedman has done more to shape how central bankers think about their jobs than Michael Woodford. Woodford’s Interest and Prices (2003) has been called the central bankers’ bible. If you have read a speech by a Fed governor in the last twenty years you have read Woodford, even if his name […]

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]]> No one since Milton Friedman has done more to shape how central bankers think about their jobs than Michael Woodford. Woodford’s Interest and Prices (2003) has been called the central bankers’ bible. If you have read a speech by a Fed governor in the last twenty years you have read Woodford, even if his name wasn’t on it.

Woodford, building on Calvo, Rotemberg, Taylor, Galí, Gertler, and others, integrated everything into a coherent, microfounded theory of monetary policy and developed its welfare implications. Households choose how much to consume using Hall’s Euler equation, firms with some market power get to change their prices only now and then, and the central bank sets the short-term interest rate. Out of these pieces comes a model in which monetary policy moves real output in the short run, and in which the main cost of inflation is that prices get out of line with one another because firms adjust at different times.

You can see the revolution since Friedman because one fun feature of Woodford’s model is that there is no money. Woodford showed you could do monetary economics in a cashless economy. That’s closer to how central banks operate today, namely, the Fed sets an interest rate and mostly ignores monetary aggregates like M2. Woodford’s book title is a homage. Interest and Prices is the English title of Knut Wicksell’s 1898 book, which argued that inflation depends on whether the central bank holds its interest rate above or below the natural rate. Woodford rebuilt Wicksell with modern tools. If Friedman taught central banks to watch the money supply, Woodford taught them to watch the gap between their policy rate and the natural rate, and to manage expectations about both.

Woodford also worked out when an interest rate rule pins down inflation. If the central bank raises nominal rates more than one-for-one with inflation, the equilibrium is determinate. If it doesn’t, expectations can become self-fulfilling (the Taylor rule but micro-founded). In a less remembered twist, he was also an early developer of the fiscal theory of the price level, which says that under some policy regimes the government’s budget determines the price level. It’s an unexpected stance for the leading New Keynesian.

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]]> https://marginalrevolution.com/marginalrevolution/2026/10/michael-woodford-wins-nobel.html/feed 0 93975 https://marginalrevolution.com/marginalrevolution/2026/10/okie-dokie-casey-handmer-edition.html?utm_source=rss&utm_medium=rss&utm_campaign=okie-dokie-casey-handmer-edition Okie-dokie, Casey Handmer edition https://feeds.feedblitz.com/~/971264780/0/marginalrevolution~Okiedokie-Casey-Handmer-edition.html https://marginalrevolution.com/marginalrevolution/2026/10/okie-dokie-casey-handmer-edition.html#comments Mon, 12 Oct 2026 04:20:47 +0000 https://marginalrevolution.com/?p=93972 I’ve been prototyping an automated peer review project. With current models you get human level peer review for about $0.10 of tokens. For $5 you can rederive every result, check every statistical inference, and audit every paper cited in both directions. There are about 100m papers in the scientific corpus. Most are not important. Many […]

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]]>

I’ve been prototyping an automated peer review project. With current models you get human level peer review for about $0.10 of tokens. For $5 you can rederive every result, check every statistical inference, and audit every paper cited in both directions.

There are about 100m papers in the scientific corpus. Most are not important. Many are sloppy. For structural reasons it’s essentially impossible to change published work, even to correct a typo.

For $500m today you can thoroughly audit every paper ever written. Every p-hacked result, every plagiarist, every fabrication, every citation club, everything.

I don’t have $500m so instead I build a tree, focusing on the 1% of papers that carry 99% of the signal, doing a cheap first pass looking for obvious problems. I can find 90% of the nonsense for a few hundred dollars of tokens.

Any guesses where the biggest surprises will be found?

Here is the link.

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]]> https://marginalrevolution.com/marginalrevolution/2026/10/okie-dokie-casey-handmer-edition.html/feed 28 93972 https://marginalrevolution.com/marginalrevolution/2026/10/sunday-assorted-links-586.html?utm_source=rss&utm_medium=rss&utm_campaign=sunday-assorted-links-586 Sunday assorted links https://feeds.feedblitz.com/~/971254451/0/marginalrevolution~Sunday-assorted-links.html https://marginalrevolution.com/marginalrevolution/2026/10/sunday-assorted-links-586.html#comments Sun, 11 Oct 2026 16:17:20 +0000 https://marginalrevolution.com/?p=93968 1. Was Leonardo da Vinci Jewish? 2. Twenty things to listen to in classical music. 3. Ezra Klein and Arvind Narayanan on AI as a normal technology (NYT). 4. Gans and Acemoglu on AI. 5. The return of Audrey Niffenegger. 6. Podcasts as the new form of comedy? (New Yorker) 7. PC on Dostoyevsky.

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]]> 1. Was Leonardo da Vinci Jewish?

2. Twenty things to listen to in classical music.

3. Ezra Klein and Arvind Narayanan on AI as a normal technology (NYT).

4. Gans and Acemoglu on AI.

5. The return of Audrey Niffenegger.

6. Podcasts as the new form of comedy? (New Yorker)

7. PC on Dostoyevsky.

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]]> https://marginalrevolution.com/marginalrevolution/2026/10/sunday-assorted-links-586.html/feed 61 93968 https://marginalrevolution.com/marginalrevolution/2026/10/sky-roomba.html?utm_source=rss&utm_medium=rss&utm_campaign=sky-roomba Sky Roomba! https://feeds.feedblitz.com/~/971243735/0/marginalrevolution~Sky-Roomba.html https://marginalrevolution.com/marginalrevolution/2026/10/sky-roomba.html#comments Sun, 11 Oct 2026 11:14:21 +0000 https://marginalrevolution.com/?p=93961 I bought a robot window cleaner. I have some high windows which need a ladder just to get the bottom and with this I can just start the robot at the bottom, it cleans the window and then returns to the start point. The bot cost me considerably less than it would have cost to […]

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]]> I bought a robot window cleaner. I have some high windows which need a ladder just to get the bottom and with this I can just start the robot at the bottom, it cleans the window and then returns to the start point. The bot cost me considerably less than it would have cost to have my windows cleaned once.

So did the robot put a human window cleaner out of work? Probably not since the price of the human cleaner was so high I wouldn’t have paid it. Thus we get an efficiency gain–clean windows, more work for the robots and more for the robot makers too.

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]]> https://marginalrevolution.com/marginalrevolution/2026/10/sky-roomba.html/feed 32 93961 https://marginalrevolution.com/wp-content/uploads/2026/10/sky-roomba-2-1.mp4 https://marginalrevolution.com/marginalrevolution/2026/10/what-should-i-ask-fuchsia-dunlop-2.html?utm_source=rss&utm_medium=rss&utm_campaign=what-should-i-ask-fuchsia-dunlop-2 What should I ask Fuchsia Dunlop? https://feeds.feedblitz.com/~/971238572/0/marginalrevolution~What-should-I-ask-Fuchsia-Dunlop.html https://marginalrevolution.com/marginalrevolution/2026/10/what-should-i-ask-fuchsia-dunlop-2.html#comments Sun, 11 Oct 2026 08:52:47 +0000 https://marginalrevolution.com/?p=93969 Yes I will be doing a fourth (!) Conversation with her, based in part on her forthcoming book Five Tastes: Delicious Recipes for Chinese Flavors.  I am sure it is excellent, and will read it very soon.  Her works are not just great cookbooks, they are among the best books period. Here are my previous […]

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]]> Yes I will be doing a fourth (!) Conversation with her, based in part on her forthcoming book Five Tastes: Delicious Recipes for Chinese Flavors.  I am sure it is excellent, and will read it very soon.  Her works are not just great cookbooks, they are among the best books period.

Here are my previous CWTs with Fuchsia.  So what should I ask?

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]]> https://marginalrevolution.com/marginalrevolution/2026/10/what-should-i-ask-fuchsia-dunlop-2.html/feed 14 93969 https://marginalrevolution.com/marginalrevolution/2026/10/the-economics-of-agents.html?utm_source=rss&utm_medium=rss&utm_campaign=the-economics-of-agents The economics of agents https://feeds.feedblitz.com/~/971235650/0/marginalrevolution~The-economics-of-agents.html https://marginalrevolution.com/marginalrevolution/2026/10/the-economics-of-agents.html#comments Sun, 11 Oct 2026 04:56:43 +0000 https://marginalrevolution.com/?p=93960 From Patrick Collison: Assorted things I’ve been mulling over regarding agents in the economy: • Companies are in some sense the original superintelligence. It’s often the case that they can use their amortized cognitive surplus to advance their interests against those of certain consumers: relative to the optimization capacity of companies, consumers can be inattentive, […]

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]]> From Patrick Collison:

Assorted things I’ve been mulling over regarding agents in the economy:

• Companies are in some sense the original superintelligence. It’s often the case that they can use their amortized cognitive surplus to advance their interests against those of certain consumers: relative to the optimization capacity of companies, consumers can be inattentive, underinformed, irrational, etc. (Think, say, of some of the classic insurance upsells at the end of a booking process, which is typically priced substantially above what a regular policy would cost.) Herbert Simon introduced the idea of bounded rationality, and firms often end up benefiting from it. Thanks to personal agents, we will probably get somewhat more rational in how we engage with companies.

• How exactly will outcomes change? Well, certain kinds of price discrimination will work less well (how do coupons work if every agent hunts fastidiously for them?), and certain kinds of customer cross-subsidy will change (today, people who forget to cancel subscriptions subsidize those who don’t). Taken across the economy as a whole, I’m not sure what the incidence of all of this will be.

• In corporate strategy, people have long debated the relative importance of distribution and product quality. Perhaps you’ve made something better, but does anyone know about it? Won’t people just continue to buy the ACME Corp Mousetraps? Personal agents will, I think, act as a kind of structural subsidy for product quality. How would markets look different if individuals always spent at least 10 hours researching their purchases? On the margin, focusing on making a product better is, I think, going to become a more effective strategy for companies. This is good!

• If true, a corollary is that information about product quality will become more important and impactful. Today, most people have very limited ability to aggregate and integrate such data, but agents will have insatiable thirst for such signals. (It’s often said that data is becoming more valuable because it helps in the training of models. That’s obviously true, but I think there’s a secondary way in which it’s more valuable simply as a complement to cheaper intelligence.)

• A big question is whether agents will increase superstar effects (rational agents all settle on the same product) or increase dispersion (because everyone has slightly different tastes and preferences, which agents are good at eliciting, finally overcoming the artificial clustering we’ve been subjected to).

• Many internet companies have monetized demand routing, which is in turn often predicated on short attention spans. “I’ll click on the first thing I see.” This has led to some amount of inefficiency, as companies try to propitiate capricious ranking algorithms and incur various placement fees. It’s not all deadweight loss (willingness to pay is itself a kind of signal, which is valuable to buyers), but it’s not great. How will the nature and value of this routing change in a world of personal agents? I don’t know the answer, but I think that the effects might be pretty big.

• Much of what I’m writing hinges on the assumption that personal agents will be on the consumer’s side. I suspect that that will be the winning strategy, but whether it’s true, and what it means to be true, involves a lot of other questions. Taken as a whole, the market is a massively parallelized, decentralized, and highly imperfect value attribution machine, and, taking stock of all of the effects, it seems to me that the quality point may well be the biggest: that agents will change the nature of the backpropagation such that the rewards for better products increase. Maybe this is too optimistic, but I suspect (and hope) that companies that make things that they’re proud of will feel that the universe is a little more partisan in their favor.

In addition to those mechanisms, I might also expect some prices to be more volatile.  Suppliers will attempt to use agents to collude, and the law may not have a simple way of stopping this practice, due to illegibility.  The practice could be illegible and unintended by the merchants themselves.  But collusion of course tends not to be stable.  So (some) prices may swoon upwards for a while, and then take sudden dips as either the collusion breaks down or new entry occurs…

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]]> https://marginalrevolution.com/marginalrevolution/2026/10/the-economics-of-agents.html/feed 34 93960 https://marginalrevolution.com/marginalrevolution/2026/10/saturday-assorted-links-582.html?utm_source=rss&utm_medium=rss&utm_campaign=saturday-assorted-links-582 Saturday assorted links https://feeds.feedblitz.com/~/971224265/0/marginalrevolution~Saturday-assorted-links.html https://marginalrevolution.com/marginalrevolution/2026/10/saturday-assorted-links-582.html#comments Sat, 10 Oct 2026 16:34:52 +0000 https://marginalrevolution.com/?p=93955 1. Claes Backman’s practical AI for academics. 2. Platypus Economics on red diesel. 3. Those new service sector jobs, Indian cricket edition. 4. Will AI make us more technocratic? 5. What should a scientific paper look like? 6. Screening for twins? 7. Chris Wickham, RIP.

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]]> 1. Claes Backman’s practical AI for academics.

2. Platypus Economics on red diesel.

3. Those new service sector jobs, Indian cricket edition.

4. Will AI make us more technocratic?

5. What should a scientific paper look like?

6. Screening for twins?

7. Chris Wickham, RIP.

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]]> https://marginalrevolution.com/marginalrevolution/2026/10/saturday-assorted-links-582.html/feed 41 93955 https://marginalrevolution.com/marginalrevolution/2026/10/earth-facts-of-the-day.html?utm_source=rss&utm_medium=rss&utm_campaign=earth-facts-of-the-day Earth facts of the day https://feeds.feedblitz.com/~/971210558/0/marginalrevolution~Earth-facts-of-the-day.html https://marginalrevolution.com/marginalrevolution/2026/10/earth-facts-of-the-day.html#comments Sat, 10 Oct 2026 07:31:46 +0000 https://marginalrevolution.com/?p=93959 Global call center headcount is 5.3% below its December 2023 peak, ending more than a decade of growth. It has fallen year over year for eight straight quarters, a decline that started in high-income countries and coincided with the rise of AI chatbots. Call center support is falling behind other white-collar work in the same […]

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  • Global call center headcount is 5.3% below its December 2023 peak, ending more than a decade of growth. It has fallen year over year for eight straight quarters, a decline that started in high-income countries and coincided with the rise of AI chatbots.
  • Call center support is falling behind other white-collar work in the same countries. Before ChatGPT, call-center headcount tracked other office and administrative roles in middle-income countries. After its launch, however, call centers have stalled or declined while the rest of white-collar work has continued to grow.
  • The better-paid white-collar roles in these middle-income countries are still growing, but most former call-center workers never reach them. Only 10.8% of those who move land in technical support, customer success, or software and data, where median pay rises 7% to 13%. Half end up in other customer service, sales, or office jobs, usually for less pay.

    • Here is more by Caelan Wilkie-Rogers.

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    ]]>     https://marginalrevolution.com/marginalrevolution/2026/10/earth-facts-of-the-day.html/feed 30 93959     https://marginalrevolution.com/marginalrevolution/2026/10/california-in-migration-and-out-migration.html?utm_source=rss&utm_medium=rss&utm_campaign=california-in-migration-and-out-migration California in-migration and out-migration https://feeds.feedblitz.com/~/971207255/0/marginalrevolution~California-inmigration-and-outmigration.html https://marginalrevolution.com/marginalrevolution/2026/10/california-in-migration-and-out-migration.html#comments Sat, 10 Oct 2026 04:26:55 +0000 https://marginalrevolution.com/?p=93956 Long-run U.S. population movements have been driven more by natural amenities than by jobs, and California, rich in both uniform and complementary climates, should be a persistent net gainer of domestic migrants. It has instead lost residents to other states every year since about 1990. This paper argues that its amenities are unchanged and that […]

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    Long-run U.S. population movements have been driven more by natural amenities than by jobs, and California, rich in both uniform and complementary climates, should be a persistent net gainer of domestic migrants. It has instead lost residents to other states every year since about 1990. This paper argues that its amenities are unchanged and that the location rents they generate have been captured politically. Capture through a land tax would be borne by landowners and would move no one. Capture through mobile tax bases-above all a steeply progressive income tax-and through restrictions on housing supply does move people, and moves particular people. Where the revenue also finances redistribution, high earners pay far more than the value of the services they receive, which pushes them out on a second count; the income tax also raises the pre-tax wages firms must pay, so jobs leave with households. Proposition 13 shifts capture onto mobile tax bases and locks long-tenured owners in place, so observed out-migration understates the underlying pressure. Internal Revenue Service data show that in 2022-23 California’s out-migrants outnumbered its in-migrants by 40 percent overall but by 64 percent among households with incomes of $200,000 or more, a pattern reversed in low-tax states. A simple cross-state comparison, which cannot hold production advantages constant, shows no relation between tax burdens and natural amenities, suggesting that competition among amenity-rich states limits capture; California, which taxes well beyond what its neighbors charge, loses residents disproportionately to them. Border comparisons and data on homeowners’ length of residence are consistent with the argument.

    Here is more from Philiip E. Graves, via the excellent Kevin Lewis.

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    ]]>     https://marginalrevolution.com/marginalrevolution/2026/10/california-in-migration-and-out-migration.html/feed 59 93956     https://marginalrevolution.com/marginalrevolution/2026/10/the-origin-of-risk.html?utm_source=rss&utm_medium=rss&utm_campaign=the-origin-of-risk The origin of risk https://feeds.feedblitz.com/~/971196824/0/marginalrevolution~The-origin-of-risk.html https://marginalrevolution.com/marginalrevolution/2026/10/the-origin-of-risk.html#comments Fri, 09 Oct 2026 18:20:57 +0000 https://marginalrevolution.com/?p=93957 From the QJE, by Alexandr Kopytov, Mathieu Taschereau-Dumouchel, and Zebang Xu: We propose a tractable model in which risk, at both the micro and macro levels, is endogenous and driven by incentives. In the model, each firm chooses the mean and the variance of its productivity process, as well as how it covaries with the productivity of other […]

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    ]]>     From the QJE, by , , and :

    We propose a tractable model in which risk, at both the micro and macro levels, is endogenous and driven by incentives. In the model, each firm chooses the mean and the variance of its productivity process, as well as how it covaries with the productivity of other firms. Aggregate risk arises when firms select productivity processes that are correlated with one another. The theory predicts that larger firms and those with lower markups are less volatile and less correlated with aggregate productivity. We find support for these predictions in the data. Through their impact on risk-taking decisions, distortions such as taxes and markups can make GDP more volatile in equilibrium. In a calibrated version of the model, removing distortions significantly reduces GDP volatility.

    Fischer Black!  (And my own earlier book Risk and Business Cycles).  Via the excellent Kevin Lewis.

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    ]]>     https://marginalrevolution.com/marginalrevolution/2026/10/the-origin-of-risk.html/feed 12 93957     https://marginalrevolution.com/marginalrevolution/2026/10/ethiopia-update.html?utm_source=rss&utm_medium=rss&utm_campaign=ethiopia-update Ethiopia update https://feeds.feedblitz.com/~/971194007/0/marginalrevolution~Ethiopia-update.html https://marginalrevolution.com/marginalrevolution/2026/10/ethiopia-update.html#comments Fri, 09 Oct 2026 16:24:04 +0000 https://marginalrevolution.com/?p=93958 Ethiopia is the center of the world right now as it has returned to war. Ethiopian forces retook Mekelle from rebel forces, but the fighting has extended beyond Tigray. Eritrean forces allegedly entered Tigray, and Ethiopia responded with drone attacks. The war could go a number of ways. The war extends beyond Ethiopia. Sara Al-Saeed […]

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    Ethiopia is the center of the world right now as it has returned to war. Ethiopian forces retook Mekelle from rebel forces, but the fighting has extended beyond Tigray. Eritrean forces allegedly entered Tigray, and Ethiopia responded with drone attacks. The war could go a number of ways. The war extends beyond Ethiopia. Sara Al-Saeed explains how Egypt extended its rivalry with Ethiopia across the Horn of Africa. Relations with Eritrea have soured. Pay attention to the Assab Port. Learn more about Abiy, internal divisions, and the regional struggle. This post provides a helpful update. Follow the conflict with ACLED. One thing is clear: The war is a betrayal of Tigray.

    From Jeffrey Paller.

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    ]]>     https://marginalrevolution.com/marginalrevolution/2026/10/ethiopia-update.html/feed 17 93958     https://marginalrevolution.com/marginalrevolution/2026/10/friday-assorted-links-594.html?utm_source=rss&utm_medium=rss&utm_campaign=friday-assorted-links-594 Friday assorted links https://feeds.feedblitz.com/~/971193467/0/marginalrevolution~Friday-assorted-links.html https://marginalrevolution.com/marginalrevolution/2026/10/friday-assorted-links-594.html#comments Fri, 09 Oct 2026 16:06:02 +0000 https://marginalrevolution.com/?p=93951 1. Charles Kenny on foreign aid. 2. Rise and fall of the plasma screen. 3. France also has very high private debt. 4. Ross Douthat will do a weekly column for The Free Press.  And from Ross himself. 5. Encryption risk? 6. “The Altruists premieres November 19.” 7. Emily Wilson on various Canadian writers.

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    ]]>     1. Charles Kenny on foreign aid.

    2. Rise and fall of the plasma screen.

    3. France also has very high private debt.

    4. Ross Douthat will do a weekly column for The Free Press.  And from Ross himself.

    5. Encryption risk?

    6. “The Altruists premieres November 19.”

    7. Emily Wilson on various Canadian writers.

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    ]]>     https://marginalrevolution.com/marginalrevolution/2026/10/friday-assorted-links-594.html/feed 56 93951