Mind Matters Natural and Artificial Intelligence News and Analysis

CategoryEconomics

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baseball players hitting

Why Giving the Second Best Guy a Chance Is a Smart Move

Business prof Gary Smith explains…

Gary Smith, author of The AI Delusion, has some interesting advice for those who think that a star athlete wins only on performance: It doesn’t quite work that way: A study by two business school professors, Cade Massey and Richard Thaler, found that the chances that a drafted player will turn out to be better than the next player drafted in his position (for example, the first quarterback drafted compared to the second quarterback drafted) is only 52%, barely better than a coin flip.Yet, teams pay much more for early draft picks than for later picks. Even leaving salary aside, teams that trade down (for example giving up the first pick in the draft for the 14th and 15th pick)…

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Inflation, dollar hyperinflation with black background. One dollar bill is sprayed in the hand of a man on a black background. The concept of decreasing purchasing power, inflation.

Will Higher Prices Disarm Russia? It’s Complicated…

The effects of hyperinflation are subtle, but very real

The annual rate of consumer price inflation in Russia was 9% in February and 17% in March. For producer prices, the March number was 27%. Is Russia headed for hyperinflation, with prices increasing at triple-digit rates or more? I don’t know, but it is worth remembering what happens during hyperinflations. Many people believe that higher prices make everyone worse off. This is not true. Buyers pay more, but sellers receive more. One person’s higher price is another’s higher income. If all prices and incomes were to increase by the same amount — say 10 percent — everyone’s real, inflation-adjusted income would be unchanged. The true costs of inflation are more subtle. In practice, within every inflation, some prices increase more…

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We studied together now were graduating together. Portrait of a group of students taking selfies on graduation day.

Historically Black Colleges/Universities Crush School Rankings

According to a new metric that rewards per-dollar effectiveness as opposed to the benefits of lavish endowments, they took three spots out of the top five

While popular rankings of colleges and universities — like that of U.S. News and World Report — have always been top secret, journalist Malcolm Gladwell, working with a team of Reed College researchers, managed to “crack the code.” And, as Academic Influence tells it, an unhappy truth emerged: What troubled Gladwell is that schools like Dillard University and Reed College could never, given the way college rankings were set up, receive the recognition they deserved. The whole ranking system was rigged against them. Gladwell focused especially on Dillard University, an HBCU [historically Black college or university] in New Orleans. By making its mission to serve underserved populations, Dillard was, in effect, getting penalized by U.S. News & World Report, which puts a premium in its…

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Empty colored carbonated drink bottles. Plastic waste

Urban Mining: Turning Urban Waste Into Valuable Products

Renowned synthetic chemist Jim Tour shows how we can turn discarded plastics into graphene, a product useful in industry

There’s a gold mine, so to speak, in the garbage but it takes a gifted chemist to develop processes that turn the trash to valuable industrial materials. At COSM 2021, James Tour talked about his team’s work in developing such processes: The Nanotech Revolution: Our Zero-Waste Energy Future (November 11, 2021) Dr. Jim Tour, Professor of Chemistry at Rice University, gives a riveting tour of how waste products can be converted to graphene, an extremely valuable material with a host of useful applications—from medical applications to new strong and lightweight materials to an energy source for zero CO2 emissions. Tour and his team have developed methods for turning carbon waste into graphene, an allotrope of carbon that can be stacked…

shopping online at home concept.Cartons in a shopping cart on a laptop keyboard

Government Control of What You Buy Grows More Popular

With governments, that is. You’d be surprised at how far along they are with digital currency and how detailed the control could be

Recently, we looked at a new idea governments are looking at — programmable digital currency. It’s all digital, issued by government, constantly trackable, and can’t be spent on items not approved by government (or only with penalties). The Federal Reserve Board (the United States’ central bank) explains, bureaucratically, Potential benefits of the “digital cash” model using programmable UTXOs are the ability to specify spending constraints on any discrete amount of value and a greater facility to trace the provenance of any particular “virtual banknote.” Alexander Lee, “What is programmable money?” at FEDS Notes (June 23, 2021) In other words, the two benefits of these central bank digital currencies (CBDCs) are that the government can potentially control what the money is…

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Technical price graph and indicator, red and green candlestick chart on blue theme screen, market volatility, up and down trend. Stock trading, crypto currency background.

Detecting BS Research: If It Seems Too Good to be True…

A recent Wall Street Journal article shows a near-perfect link between inflation and money. But a link that near-perfect raises suspicions

Two Johns Hopkins economists recently wrote a Wall Street Journal opinion piece titled, “Jerome Powell Is Wrong. Printing Money Causes Inflation.” Their argument is that Federal Reserve chair Powell is mistaken in his assertions that there is not a close relationship between money and inflation. As evidence, they offer the chart below, showing that the rate of inflation can be predicted almost perfectly from the rate of increase of M2, a broad measure of money. The authors explain: The theory rests on a simple identity, the equation of exchange, which demonstrates the link between the money supply and inflation: MV=Py, where M is the money supply, V is the velocity of money (the speed at which it circulates relative to total spending), P…

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The forest and the trees are in the light. Concepts of environmental conservation and global warming plant growing inside lamp bulb over dry soil in saving earth concept

Business Prof: We Live in an Era of Unprecedented Abundance

If we’re not making good use of it or it’s not fairly distributed, those are different problems

At COSM 2021, business studies prof Jay Richards of the Catholic University of America spoke with Gale Pooley, also a business studies prof at Brigham Young University-Hawaii, on a fact we don’t hear much about in popular media focused on current events: Increasing knowledge and the subsequent dropping over of time prices have ushered in a vast improvement in standards of living. Many will ask, what about rising prices? Well, for example, we must compare rising prices due to various global events today to what things cost in the past: At COSM 2021, Pooley focused on the fact that, in real-world economics, the value of our time is the most critical factor we need to figure in: Brigham Young University…

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Freedom Convoy 2022 sign

No-Buy Lists Are the Next Big Thing After Debanking

When a big online financial service like PayPal works closely with government to monitor citizens, it is violating its founding ideals

Yesterday, Jonathan Bartlett was writing about the way banks were becoming political in terms of who they are choosing to do business with, otherwise known as debanking. Another trend to watch for is no-buy lists, according to former PayPal COO David Sacks: When I helped create PayPal in 1999, it was in furtherance of a revolutionary idea. No longer would ordinary people be dependent on large financial institutions to start a business. Our democratized payment system caught fire and grew exponentially with millions of users who appreciated its ease and simplicity. Traditional banks were too slow and bureaucratic to adapt. Instead, the revolution we spawned two decades ago inspired new startups like Ally, Chime, Square, and Stripe, which have further…

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Glowing forex chart background

What If Quantum Physics Were Applied To Economics?

A mathematician argues that ideas that seemed bizarre in classical physics makes perfect sense in economics

Applied mathematician David Orrell offers a look at the difference quantum mechanical thinking would make to economics. The author of Money, Magic, and How to Dismantle a Financial Bomb: Quantum Economics for the Real World (2022) received considerable criticism for an article he wrote four years ago, “Economics is quantum,” which he summarizes in a followup article, published this month: The idea is that money is best understood as a quantum social technology, with quantum properties of its own. In financial transactions, for example, value can be modelled as a probabilistic wave function which ‘collapses’ down to an exact number when money is exchanged. When you put your house up for sale, you might have a fuzzy idea of its…

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Aerial view over Cupertino in Bay Area, California on a sunny day.

Is It Really the End for Silicon Valley or Just a Reboot?

A COSM 2021 panel looked at the effect of remote work, spurred by the COVID-19 pandemic, on iconic locations like the Valley

“Is It the End for Silicon Valley?” was one of the discussions at COSM 2021 (2:00 pm, Wednesday, November 11, 2021). It featured Babak Parviz, Vice President of Amazon Inc. but best known as the inventor of Google Glass, who served as moderator Lynne Robinson, mayor of the City of Bellevue Walter Myers III, Principal Engineering Manager at Microsoft, and Bob Metcalfe, Engineer, Entrepreneur, and Professor of Innovation. The conversation turned on whether, in the internet age, one needs to work in any specific locality, like Silicon Valley. Some of their comments relating to where people will live in relation to their work and the problems they will face are transcribed below: Work where you live or live where you…

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Close up of top important cryptocurrencies which dollar bank note in background. which including of Bitcoin, Ethereum, Litecoin, Dash, Zcash and Ripple coin. Business and financial as concept.

Why Cryptocurrencies Like Bitcoin Are Not Ready for Prime Time

Bernard Fickser at Expensivity — friendly to cryptos in principle — offers an unsparing look at the current problems

At Expensivity, Bernard Fickser, who has explained how to sell non-fungible tokens (NFTs) now offers “The Truth About Cryptocurrencies: A Clearheaded Guide to the Crypto World.” (January 15, 2022) For your convenience, we are serializing his work, which can be read in whole here. Here’s Part 6 (of 6): 6 Conclusion: Is Crypto a Mature Technology? So far, this article’s approach to crypto has been a balancing act, weighing pros against cons. Thus, we’ve seen much to commend crypto, but also much to raise doubts about it. In this closing section, I’m going negative. My concluding thesis is this: peer-to-peer distributed blockchain-based cryptocurrencies as they exist now represent an immature technology and miss much of what we would like to see…

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sack with the thirty silver coins biblical symbol of the betrayal of judas

Is Cryptocurrency Selling Out to Centralization?

Compared to more conventional forms of money, crypto wealth is radically centralized in the hands of a few

At Expensivity, Bernard Fickser, who has explained how to sell non-fungible tokens (NFTs) now offers “The Truth About Cryptocurrencies: A Clearheaded Guide to the Crypto World.” (January 15, 2022) For your convenience, we are serializing his work, which can be read in whole here. Here’s Part 5 (of 5): 5 The Centralization of Crypto Wealth Decentralization is a watchword of crypto. One of the things said to commend cryptocurrencies is that the blockchain-based peer-to-peer networks that run them are decentralized, residing outside the control of any single authority. This claim that cryptocurrencies are decentralized in their organizational structure is overstated because the peer-to-peer networks that run them can themselves act as central authorities. True, these peer-to-peer networks feel freer and…

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Bitcoin and cryptomoney

How and Why Cryptocurrencies Are Revolutionizing Money

The trouble is, cryptos are an immature technology at present and that fact may doom many of the current ones

At Expensivity, Bernard Fickser, who has explained how to sell non-fungible tokens (NFTs) now offers “The Truth About Cryptocurrencies: A Clearheaded Guide to the Crypto World.” (January 15, 2022) For your convenience, we are serializing his work, which can be read in whole here. Here’s Part 4: 4 Crypto’s Revolution in Money and Finance Cryptocurrencies seem different from mass delusions of the past. They do novel things in the world of finance that many people want, such as allow for anonymous exchanges of digital currency that feel a lot like exchanges of ordinary cash. They promise to bypass intrusive government control. And they’ve attracted a lot of very smart talent that is deploying some very cool mathematics and computer science.…

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Cryptography Concept, Cryptographic Hash Algorithm SHA-2

As Money Slowly Transitions From Matter to Information…

Let’s look at a brief history of cryptocurrencies — which is not quite what we might think

At Expensivity, Bernard Fickser, who has explained how to sell non-fungible tokens (NFTs) now offers “The Truth About Cryptocurrencies: A Clearheaded Guide to the Crypto World.” (January 15, 2022) For your convenience, we are serializing his work, which can be read in whole here. Here’s Part 3: 3 A Concise History of Cryptocurrencies The use of cryptography to make digital financial payments has been around for decades, but that by itself does not make a cryptocurrency. A cryptocurrency is not just an electronic or digital form of money, even if the two are often confused and even though they all use cryptography to secure transactions. For something to be a full-fledged cryptocurrency, it must satisfy the following four conditions. Spoiler alert:…

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Mature crypto trader investor analyst broker using pc computer analyzing digital cryptocurrency exchange stock market trading graphs report thinking of investing funds risks doing global analysis.

If You Want To Stick a Toe in Bitcoin’s World … Read This First

This short guide offers a quick introduction to the two biggies, Bitcoin and Ethereum

At Expensivity, Bernard Fickser, who has explained how to sell non-fungible tokens (NFTs) now offers “The Truth About Cryptocurrencies: A Clearheaded Guide to the Crypto World.” (January 15, 2022) For your convenience, we are serializing his work, which can be read in whole here. Here’s Part 2: 1 Quick Entry into Crypto Investing This first section is for those who want to begin investing in crypto right away. But it is also for those who simply want to understand cryptocurrencies without investing in them. Later sections will present the underlying theory and history of crypto, as well as reasons to take crypto seriously but also to be cautious. Yet it helps to see how cryptocurrencies actually behave in practice, and…

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matching keys made of circuits & led lights, encryption & crypto

Some brute facts about Bitcoin and other cryptos

Crypto is transforming money and finance. Like the computer, you don’t need to use one but you’re wise to know the basics. Start here

At Expensivity, Bernard Fickser, who has explained how to sell non-fungible tokens (NFTs) now offers “The Truth About Cryptocurrencies: A Clearheaded Guide to the Crypto World.” (January 15, 2022) For your convenience, we are serializing his work, which can be read in whole here. Here’s Part 1: Even though most people own no cryptocurrency, cryptocurrency still matters to the average person. That’s because crypto (or cryptocurrency) is transforming the world of money and finance, and everyone has a stake in that world. The average person therefore needs a basic grasp of crypto and why it is important. It’s not enough, however, simply to know about crypto. To really understand crypto, you need sound actionable information about investing in crypto and…

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Bull figurine standing on bitcoins, concept of cryptocurrencies

What’s the future for cryptocurrencies?

Currencies that do not depend on government have survived and are forging ahead

One of the most interesting developments in economics in past decades has been the effort to develop currencies (money) that does not depend on government. From time immemorial, governments have issued currency. It was a key part of their power. Cryptocurrencies are based on the assumption that trust alone will work. Here are some of the things that are happening for cryptos in 2022: Sandra Ro, CEO of of Global Blockchain Business Council told Coin Telegraph: “ In 2022, it will be ‘corporate career risk’ to not have a baseline understanding of cryptocurrencies and blockchain technology. From bankers to corporate executives to politicians, it is imperative that they get on board and seriously consider the implications of blockchain. Further, 2022…

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Businesswoman Signing Cheque

Mental Models for What Government Does With Our Money

Models used by pedantic experts, even if more accurate, confuse instead of clarify the key difference between taxation and government debt

We live by mental models. Although we rarely take the time to think about it, any time we reason about something we are using a mental model. Sometimes those models are close to reality, and sometimes they are not. When you turn your steering wheel, it does in fact turn your tires — but power steering adds quite a bit of assistance. So the mental model is close to correct but not exactly true. Similarly, in chemistry, multiple models of the atom are usually taught. In the widely used Rutherford model (also called the “planetary model”), electrons “orbit” the nucleus at different distances. However, this model was not found to be precisely true. A more precise view of the atom…

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Decreasing and increasing graph on chalkboard

The Cult of Statistical Significance — and the Neglect of Oomph

Statistical significance has little meaning when separated from practical importance

A central part of John Maynard Keynes’ explanation of the Great Depression was his assertion that household income affects household spending. When people lose their jobs and income, they cut back on their spending, which causes other people to lose their jobs and their income — propelling the economy downhill. Keynes’ theory was based on logic and common sense. It was later tested empirically with household survey data and with national income data compiled by the National Bureau of Economic Research. Figure 1 shows U.S. after-tax personal income and consumer spending for the years 1929 through 1940. Since income and spending both tend to grow over time along with the population, the data were converted to annual percentage changes. The observed statistical…

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NFT | Non-Fungible Token

NFTs: Can They Help You Sell Digital Memorabilia Online?

Non-fungible tokens (NFTs) like Jack Dorsey’s first tweet or Michael Cohen’s prison badge are creating a new market with a need for new rules

At COSM 2021,William Dembski, a mathematician and philosopher who studies cryptocurrencies like Bitcoin and non-fungible tokens (NFTs), offered some thoughts on whether NFTs (non-fungible tokens) can help artists and other creators make a living selling their work on the internet. Are NFTs just “rat poison squared,” as Warren Buffett calls cryptocurrencies? Well, former Twitter CEO Jack Dorsey’s first tweet sold for a reported $2.9 million. It’s complex but navigable. According to Dembski, it might be a way forward. But there are pitfalls. The non-tech part is easy to understand. Just as internet-based subscription services like Substack offer a way for talented writers to make a good living free from censorious mediocrities, so NFTs might help artists market their work in…