Posts filed under ‘Recommended Reading’
Personnel Economics Survey
| Peter Klein |
Paul Oyer and Scott Schaefer provide a helpful overview:
Personnel Economics: Hiring and Incentives
Paul Oyer, Scott Schaefer
NBER Working Paper No. 15977We survey the Personnel Economics literature, focusing on how firms establish, maintain, and end employment relationships and on how firms provide incentives to employees. This literature has been very successful in generating models and empirical work about incentive systems. Some of the unanswered questions in this area — for example, the empirical relevance of the risk/incentive tradeoff and the question of whether CEO pay arrangements reflect competitive markets and efficient contracting — are likely to be very difficult to answer due to measurement problems. The literature has been less successful at explaining how firms can find the right employees in the first place. Economists understand the broad economic forces — matching with costly search and bilateral asymmetric information — that firms face in trying to hire. But the main models in this area treat firms as simple black-box production functions. Less work has been done to understand how different firms approach the hiring problem, what determines the firm-level heterogeneity in hiring strategies, and whether these patterns conform to theory. We survey some literature in this area and suggest areas for further research.
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Religion and Economic Development
| Peter Klein |
Thanks to Tyler for calling my attention to Davide Cantoni’s job-market paper, “The Economic Effects of the Protestant Reformation: Testing the Weber Hypothesis in the German Lands”:
Many theories, most famously Max Weber’s essay on the ‘Protestant ethic,’ have hypothesized that Protestantism should have favored economic development. With their considerable religious heterogeneity and stability of denominational affiliations until the 19th century, the German Lands of the Holy Roman Empire present an ideal testing ground for this hypothesis. Using population figures in a dataset comprising 276 cities in the years 1300-1900, I find no effects of Protestantism on economic growth. The finding is robust to the inclusion of a variety of controls, and does not appear to depend on data selection or small sample size. In addition, Protestantism has no effect when interacted with other likely determinants of economic development. I also analyze the endogeneity of religious choice; instrumental variables estimates of the effects of Protestantism are similar to the OLS results.
In my AE 8050 class last semester we discussed several papers on religion, and other aspects of culture, as they affect economic development (e.g., Stulz and Williamson, 2003). Cantoni’s paper will go on my reading list next year.
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Strategy Making and PowerPoint
| Nicolai Foss |
We have blogged more than two dozen times on PowerPoint (here) and at least as many times on pomo (here), never realizing that the two themes are connected. In a recent paper, “Strategy and PowerPoint: An Inquiry into the Epistemic Culture and Machinery of Strategy Making” (forthcoming in Organization Science), the ever-interesting Sarah Kaplan poses the question, “How is PowerPoint engaged in the discursive practices that make up the epistemic culture of strategy making?”
Yes, this does smack of hardcore pomo, and would prima facie seem to be up for hard lashing under the O&M rubric of “Pomo Periscope.” However, upon reading, it turns out that this is highly reasonable, well executed, and meaningful pomo. In a nutshell, Sarah argues that PP is a privileged strategy-making support tool, and that it may usefully be analyzed as a genre. And it matters to strategy making, as suggested in this key passage in the paper:
I show how the affordances of PowerPoint enabled the difficult task of collaborating to negotiate meaning in a highly uncertain environment, creating a space for discussion, making combinations and recombinations possible, allowing for rapid adjustments as ideas evolved and providing access to a wide range of actors, no matter how dispersed over space or time. Yet, I found, these affordances also supported cartographic efforts to draw boundaries around the scope of a strategy, certifying certain ideas and not others, and allowing document owners to include or exclude certain slides or participants and control access to information. Cartography in the world of ideas is similar to cartography of the physical landscape: drawing maps and defining boundaries help people navigate otherwise uncertain terrain. These collaborative and cartographic practices shaped the strategic choices and actions taken in the organization.
Westhoff’s The Economics of Food
| Peter Klein |
Congratulations to my colleague Pat Westhoff for his new book, The Economics of Food: How Feeding and Fueling the Planet Affects Food Prices (Financial Times Press, 2010). A highly readable account of food markets and food and agricultural policy. Includes some wise words about forecasting:
One thing FAPRI has learned over the years is that people who make and use market projections need a good sense of perspective — and humor. In a rapidly changing world, even the best projections have a very short shelf life. The economic models used to develop the projections necessarily rely on a long series of assumptions, and at least some of these assumptions always prove to be incorrect when viewed with 20-20 hindsight. . . .
For all these reasons, this book uses market projections by FAPRI and other institutions simply to illustrate important points, rather than to predict what will actually happen. If there is one lesson readers should take away from this book, it is that analysts who say they know exactly who food prices will evolve in the future are misleading their audience or fooling themselves.
Update (20 April 2010): While stranded in Germany waiting for a flight home, Pat wrote an item for Freakonomics.
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Where to Submit?
| Lasse Lien |
If you havent optimized your submission strategy this paper might be useful. Here’s the abstract:
In this paper, we analyze the problem faced by impatient researchers attempting to balance the considerations of journal quality, submission lags, and acceptance probabilities in choosing appropriate outlets for their work. We first study the case in which probabilities of submission outcomes are exogenous parameters and show that authors can find the optimal submission path through the use of journal ‘scores’ based only on the journals’ characteristics and the author’s degree of impatience. Then, we analyze a more realistic framework in which acceptance probability is determined by the quality of the manuscript, in which the reviewing process may be imperfect, and in which authors may not be certain of the manuscript’s quality. Throughout, we illustrate our analysis with data on actual economics journals. We also consider the problem of journals facing a large number of submissions, limited space, and limited resources to review papers and, in particular, we examine the relative effectiveness of using submission fees and reviewing lags to ration article submissions.
Reference: Martin Heintzelman and Diego Nocetti, Diego (2009), “Where Should we Submit our Manuscript? An Analysis of Journal Submission Strategies,” The B.E. Journal of Economic Analysis & Policy: 9 : Iss. 1 (Advances), Article 39.
Assessing the Critiques of the RBV
| Nicolai Foss |
There is little doubt that the resource-based view, in its various guises and manifestations (e.g., see Gavetti & Levinthal’s distinction between “high church” and “low church” approaches to the RBV), is the dominant perspective in strategic management research. Naturally, all dominant approaches attract critique like flies. This is amplified by the fact that the RBV is still evolving; many things have been unclear (e.g., what exactly is assumed about managerial rationality, the game forms that describe strategic factor markets, the interaction (if any) between factor market and product market behaviors, etc.), and those things that have been reasonably clear (e.g., the RBV’s reliance on competitive equilibrium models) have been controversial. Some of the critiques of the RBV are fairly well-known, for example, the Priem and Butler tautology charge, while other critiques are less generally known.
Given that many of the critiques have basically been around for two decades or more, it is surprising that the first comprehensive treatment of the many critiques of the RBV has just been published — namely Kraaijenbrink, Spender, and Groen’s “The Resource-based View: A Review and Assessment of Its Critiques.” (more…)
Mises Quote of the Day
| Peter Klein |
Nothing can be known about such matters as inflation, economic crises, unemployment, unionism, protectionism, taxation, economic controls, and all similar issues, that does not involve and presuppose economic analysis. All the arguments advanced in favor of or against the market economy and its opposites, interventionism or socialism (communism), are of an economic character. A man who talks about these problems without having acquainted himself with the fundamental ideas of economic theory is simply a babbler who repeats parrotlike what he has picked up incidentally from other fellows who are not better informed than he himself.
This is from Mises’s introduction to the 1959 edition of Böhm-Bawerk’s massive 3-volume set, Capital and Interest. Mises gives some further admonitions: “A man not perfectly familiar with all the ideas advanced in these three volumes has no claim whatever to the appellation of an economist.” This is, shall we say, a minority view. And my personal favorite: “A citizen who casts his ballot without having studied to the best of his abilities as much economics as he can fails in his civic duties. He neglects using in the appropriate way the power that his citizenship has conferred upon him in giving him the right to vote.”
Those lacking time to study Capital and Interest in its entirety may enjoy this new edition of Böhm-Bawerk’s essay “Control or Economic Law,” which is more easily digested.
Org. Structure and Diversification
| Peter Klein |
The March 2010 issue of the Journal of Industrial Economics has just come out, and it features my paper with Marc Saidenberg, “Organizational Structure and the Diversification Discount: Evidence from Commercial Banking.” I’m quite happy with the paper, which went through many rounds of revision and consumed a great deal of time and energy. I blogged the details earlier. The published version is behind a firewall; if you can’t get through I’d be happy to mail you a copy.
New Issue of QJAE
| Peter Klein |
The new issue of the Quarterly Journal of Austrian Economics (volume 12, no. 3) has several papers of likely interest to O&Mers. For instance:
Jack High, “Entrepreneurship and Economic Growth: The Theory of Emergent Institutions”
This paper enlarges Menger’s theory of the origins of money by making explicit the role of entrepreneurship in the theory and by extending the theory to market institutions other than money. Drawing on the research of anthropologists, archaeologists, and historians, the paper considers the origins of three institutions that underlie economic growth — the division of labor, monetary accounting, and private property. Menger’s generalized theory of the origins of institutions is used to interpret each of these institutions.
Laurent A.H. Carnis, “The Economic Theory of Bureaucracy: Insights from the Niskanian Model and the Misesian Approach”
Governmental interventions in the economy take numerous forms, and they require the existence of a public authority, a bureaucracy, to implement them. This article proposes an analysis of the origins and the dynamics of bureaucracy, and discusses means of escaping bureaucracy’s disadvantages. I will proceed by means of a comparison between the theories of Niskanen and Mises, two impressive and very representative works from the Public Choice School and the Austrian School of economics. Although Mises and Niskanen share a common analysis of the defect of bureaucratic management, there are strong disagreements between the two authors about the reasons for the existence of bureaus and about their functioning and their deficiencies. Inevitably, the means proposed by Niskanen and Mises for escaping the disadvantages of bureaucracy are different and cannot be reconciled.
Industry-Level Effects of Government Spending
| Peter Klein |
A consistent theme of this blog’s postings on the financial crisis and recession is that the Keynesians focus on too high a level of aggregation. As economists and management scholars we care primarily about industries, firms, and individuals, not abstract macroeconomic aggregates like GDP, the “price level,” etc. Heterogeneity matters, and the way stimulus programs affect the allocation of resources across firms and industries is as important, or more important, than their economy-wide effects.
A new NBER paper by Christopher Nekarda and Valerie Ramey uses disaggregated industry-level data to examine the effect of the current US stimulus program on output, employment, real wages, and productivity. They find, not surprisingly, that increases in government spending directed toward a specific industry raise that industry’s short-term output and employment but — contrary to New Keynesian predictions — reduce that industry’s real wages and productivity.
Nekarda and Ramey note that stimulus spending has been directed disproportionately to durable-goods manufacturing and that these industries have higher returns to scale than other industries, possibly explaining how reductions in industry-level productivity could look like productivity gains in the aggregate. In other words, stimulus spending reduces efficiency in all industries, but directs resources toward industries that were more efficient to begin with, giving the appearance of a positive aggregate effect. Thoughtful and provocative.
Comparative Institutional Analysis and the New Paternalism
| Peter Klein |
Comparative institutional analysis — defined as the assessment of feasible organizational or policy alternatives — is at the heart of the new institutional economics. Most economists and management scholars recognize, at least implicitly, that individuals and organizations don’t think, act, and choose with reference to some kind of global optimum, but are always evaluating trade-offs among imperfect alternatives. Yet, when it comes to public policy, even trained economists and strategy scholars easily lapse into Nirvana mode. Recent examples discussed her at O&M include the debate over Fed independence, the role of financial regulators more generally, and the “soft” or “libertarian” paternalism favored by Obama’s man Cass Sunstein, among others.
The new paternalism literature suggests that private actors suffer from biases and cognitive limitations such as lack of willpower or self-control, status quo bias, optimism bias, and susceptibility to framing effects leading them to make decisions that are inconsistent with their own preferences. By making marginal changes to the options available to market participants (“nudges”), the private benefits and costs of various actions, and the informational environment in which choices are made, market participants can be led to make “better” choices without reliance on heavy-handed, top-down regulation. The problem, of course, is that this literature virtually ignores the cognitive and behavioral limitations affecting policymakers. Incentive problems are an obvious example, along with the “slippery-slope” problem: the vulnerability of new paternalist proposals “to slippery slopes that can lead from modest paternalism to more extensive paternalism” (Rizzo and Whitman, 2009, p. 667).
Mario Rizzo and Glen Whitman’s have written an excellent set of papers on the new paternalism, the latest of which focuses on the knowledge problem, and how dispersed, tacit knowledge about preferences and constraints limits policymakers’ ability to plan paternalist policies that actually make people better off. The paper is here, and Mario blogs about it here. Highly recommended!
Product and Factor Markets in the RBV
| Nicolai Foss |
It is often argued that firm strategy is fundamentally rooted in various imperfections. Strategic management has long been characterized by an intellectual division of labor in which the resource-based view handled (strategic) factor market imperfections and various positioning approaches took care of product market imperfections. This dichotomy is beginning to break down. Two recent papers, one a theory of science-based piece, the other a theory piece, discuss the product/factor market dichotomy and show why it is problematic.
In “Theoretical Isolation and the Resource-based View: Symmetry Requirements and the Separation Between Product and Factor Markets,” Niklas Hallberg and yours truly argue that the RBV treats factor markets as imperfect and product markets as perfect (an approach that we argue is adopted from mainstream economics and its tendency to work with on-off assumptions). We argue that this asymmetry is problematic, as there is a general case to be made for symmetrical assumptions and as it borders on logical inconsistency to assume — within the same model — that one set of markets is perfect and another set is imperfect. The paper isn’t online, but you can email me at njf.smg@cbs.dk for a copy. (Abstract below).
In “Chicken, Stag, or Rabbit? Strategic Factor Markets and the Moderating Role of Downstream Competition,” my CBS (Center for Strategic Management and Globalization) colleague, Dr. Christian Geisler Asmussen, models various deviations from perfect(ly competitive) product markets and shows how these impacts firms’ factor market behaviors and whether they can derive rents from resources purchased on these markets. I believe this is the first systematic study of its kind in the literature (and there are some seriously counter-intuitive findings in it). Very highly recommended! (more…)
Cooperation and the Team Problem
| Nicolai Foss |
Alchian and Demsetz’s famous 1972 paper on the team problem and how resolving that problem may call for the “classical capitalist firm” is one of my teaching favorites. Students like the stark, stylized reasoning in the paper, and the team problem is a great way to introduce agency theory, among other things, because it so directly links to what is usually the only piece of game theory they know, namely the PD game.
However, I often experience that some students (particularly those who are following an OB or HRM class) are worried about the reasoning in Alchian and Demsetz, and are not convinced by the argument that it is basically counterfactual (provided they understand this point). I usually also explain that experimental evidence from the public goods literature suggests that cooperativeness declines over time (e.g., here) unless cooperation is backed up by various flanking arrangements (a recent Nobel can now be invoked in support of this).
A recent experimental paper, “Not just hot air: normative codes of conduct induce cooperative behavior,” — written by a German team (Thomas Lauer, Bettina Rockenbach, and Peter Walgenbach), and published in the newly founded Review of Managerial Science — suggests that the verbal framing of a work environment with cooperative connotations may go a long way towards inducing cooperativeness in team settings. In their experiments, the authors implement five “treatments” that differ only in terms of the framing, specifically in the extent to which reference is made to a cooperative firm context.
The basic experimental setup is team production with teams of four members that each have to make decisions on whether to invest or not in a team project. Each unit invested generates a benefit of 1.6 units for the team — but those benefits are divided equally among all team members. In this setting, changes in framing dramatically influence outcomes. I recommend the paper as a fascinating example of the emerging intersection of the economics of the firm, OB, and experimental methods.
Top Scholar Presidents and University Performance
| Nicolai Foss |
Last Friday my unit at CBS, the Center for Strategic Management and Globalization, sponsored a seminar with Dr. Amanda Goodall, the author of Socrates in the Boardroom: Why Research Universities Should be Led by Top Scholars. (For an earlier O&M post on Goodall, see here). Not only did the upper CBS echolons show up (the Research Dean and the President — both highly cited scholars, BTW), but we also had a long and lively discussion. A highly undull seminar!
Goodall’s findings are mainly based on UK data. Roughly, they are that university rankings correlate rather closely with how well-cited the presidents of the relevant universities are, and that there is strong evidence of the research standing of presidents driving university performance. It is hard to understand why this finding (or the book in general) was dissed by Tyler as a “radical attack on economic reasoning” (here).
Anyway, Goodall’s findings made me wonder whether the finding of causality from president/vice-chancellor/BSchool dean generalizes to other university bureaucrats, notably department heads (and deans in general, not just BSchool deans). Many of the things that are being said in the book of the top scholar-president (an example, somebody who defines the standard, an expert etc.) are things that can be said of department heads in well-functioning research universities. Perhaps one of the ways in which university presidents/VCs/deans matter to research performance is by picking good department heads. Also,Goodall claims that top scholars will not have positive performance consequences if they assume the presidency of bad or mediocre universities. She doesn’t really present evidence for this claim, although it does sound intuitive that a Nobel Prize winner is not best placed at the helm of University of Crapville. However, it may be interesting to look at less extreme cases. I do think there are cases of highly regarded scientists helping rather mediocre universities to improve.
Ennen and Richter on Complementarity
| Nicolai Foss |
The notion of complementarity unites a number of the key concerns of this blog: It has been central in Austrian capital theory since Menger, it is key both in (sociological) organization theory (e.g., here) and in organizational economics (e.g., here), and it is of considerable relevance to the explanation of (sustained) performance difference (e.g., here). (In organizational economics and strategic management, complementarity is usually given the specific interpretation of “Edgeworth complementarity“). Complementarity has also helped to link some of these areas (e.g., here and here).
In a paper, “The Whole is More Than the Sum of Its Parts, Or Is It? A Review of the Empirical Literature on Complementarities in Organizations,” in the most recent issue of the Journal of Management, Edgar Ennen and Ansgar Richter of the European Business perform what is probably the first stocktaking of the complementarity literature. It is very well done and in many ways an eye-opener. Of particular interest is their separation of the literature in those that take an “interaction approach,” focusing on specific interaction effects among specific (typically few) elements (e.g., of organization structure) and those that take a “systems approach” and consider the performance outcomes of entire sets of multiple elements. (My own work with Keld Laursen on complementarity falls in the latter category). Here is the abstract:
The concept of complementarity denotes the beneficial interplay of the elements of a system where the presence of one element increases the value of others. However, the conceptual work on complementarities to date has not progressed sufficiently to constitute a theory that would offer specific predictions regarding the nature of the elements that form complementary relationships or the conditions for their emergence. To advance our understanding of complementarities, the authors provide a synoptic review of the empirical studies on this concept in leading journals in management, economics, and related disciplines over the period 1988-2008. The authors find that whether a study provides evidence of complementarities in organizations is at least partially driven by its investigative approach. On the basis of the findings, the authors argue that complementarities are most likely to materialize among multiple, heterogeneous factors in complex systems. Therefore, the absence of complementary relationships between a limited set of individual factors may not negate the possibility of complementarities, but rather point to the need for including further systems-specific factors in the analysis. The authors conclude by providing directions for future theoretical and empirical research and outlining managerial implications of the work.
New Book: The Invention of Enterprise
| Peter Klein |
I’m putting this one on my Amazon wish list: The Invention of Enterprise:
Entrepreneurship from Ancient Mesopotamia to Modern Times, edited by David Landes, Joel Mokyr, and Will Baumol (Princeton, 2010). Check out the Table of Contents — an all-star lineup of entrepreneurship scholars and economic and business historians.
Measuring the Returns to R&D
| Peter Klein |
A new paper by Bronwyn Hall, Jacques Mairesse, and Pierre Mohnen surveys the technical literature on private and aggregate returns to R&D, focusing on econometric issues. A great overview, with the relevant factoids conveniently summarized in tables. The version linked above is gated; I don’t know if there is an ungated one.
Dilbert takes a somewhat different perspective.
Update: an ungated version is available on Bronwyn’s research papers page.
Robert Sugden
| Nicolai Foss |
I have become a huge fan of Robert Sugden, an economics Professor at the University of East Anglia and one of the most cited UK economists. Readers of this blog may know Sugden’s work from, for example, his excellent 1986 book, The Economics of Rights, Co-operation, and Welfare, as well as his papers on spontaneous order (e.g., here or here). Much of Sugden’s research lies in the zone of overlap between game theory (mainly experimental game theory and coordination games) and moral and political philosophy, and he is engaged in a constant dialogue with scholars in, or associated with, the classical-liberal tradition, such as Hume, Mill, and Hayek. He is the rare economist who, like Frank Knight, manages to publish in American Economic Review as well as in Ethics.
I am reading through Sugden’s recent publications and recommend the following as being of particular interest to the O&M readership:
- “Can Economics Be Founded on “Indisputable Facts of Experience”? Lionel Robbins and the Pioneers of Neoclassical Economics” — An attack on Robbins’ Essay that may also challenge followers of praxeology.
- “Fraternity: Why the Market Need Not Be a Morally Free Zone“(with Luigino Bruni) — Drawing on the work of a contemporary of Adam Smith, Antonio Genovesi, Sugden and Bruni criticize the idea (reflected in, e.g., Williamson’s distinction between “trust as calculative risk” and “trust proper”) that one can make a distinction between market relationships and genuinely social relationships. Market relationships also have elements of joint intentions for mutual assistance.
- The basis for the latter point can be found in “The Logic of Team Reasoning” which is a case for placing agency at the level of teams, specifically those teams that make use of team reasoning. The basic idea is that when team members reason in this way, they consider which combinations of actions will best promote the team objectives, and choose actions accordingly.
- If the above sounds at variance with classical liberalism (which I don’t think it necessarily is), check out Sugden’s criticism of Thaler and Sunstein (here) or his various critical discussions of the notion of “opportunity” in welfare economics (Sen, Cohen, Roemer) (e.g., here) which are all in the mainstream of classical-liberal thought.
Relatedness and Industry Structure
| Lasse Lien |
According to this, shameless self-promotion is OK. So here is a recent Lien and Foss paper (from MDE). The abstract goes as follows:
This paper reports two new empirical regularities concerning industry concentration. First, concentration levels closely correlate in related industries. Second, the correlation is moderated by the degree of relatedness between the industries. These regularities are derived from the Trinet database, using a survivor-based measure of relatedness. We argue that these previously overlooked relations may be explained in terms of (1) spillover effects between industries and (2) life cycle factors.
The Igon Value of Cognitive Dissonance
| Dick Langlois |
Some of you may have seen Steven Pinker’s review of Malcolm Gladwell’s latest book in the New York Times this weekend. Pinker praises Gladwell’s writing and his instinct for interesting topics, but skewers him for his bad grasp of the underlying science of what he writes about, especially statistics. In Pinker’s view, Gladwell is in the end a character from one of his own essays, “a minor genius who unwittingly demonstrates the hazards of statistical reasoning and who occasionally blunders into spectacular failures.” One blunder seems to epitomize Pinker’s assessment: Gladwell’s report on an expert who talks of “igon values” instead of eigenvalues. Pinker call this the igon value effect.
As I read this, I thought back to a department seminar I had attended a couple of days earlier. Keith Chen from Yale gave one of the most dazzling presentations I’ve heard in a long time. He basically demolished 45 years of experimental results in social psychology that claim to have discovered cognitive dissonance in choices. According to this literature, it is among the best-documented results in psychology that people change their preferences after making a choice so as to rationalize the choice and make themselves feel better about their decision. Chen argues — persuasively — that essentially all these results are statistical artifacts. At a much more sophisticated level, social psychologists have fallen victim to the igon value effect. Here is the abstract of a working paper, though it gives only a hint of how clever this research is.
Cognitive dissonance is one of the most influential theories in social psychology, and its oldest experiential realization is choice-induced dissonance. Since 1956, dissonance theorists have claimed that people rationalize past choices by devaluing rejected alternatives and upgrading chosen ones, an effect known as the spreading of preferences. Here, I show that every study which has tested this suffers from a fundamental methodological flaw. Specifically, these studies (and the free-choice methodology they employ) implicitly assume that before choices are made, a subject’s preferences can be measured perfectly, i.e. with infinite precision, and under-appreciate that a subject’s choices reflect their preferences. Because of this, existing methods will mistakenly identify cognitive dissonance when there is none. This problem survives all controls present in the literature, including control groups, high and low dissonance conditions, and comparisons of dissonance across cultures or affirmation levels. The bias this problem produces can be fixed, and correctly interpreted several prominent studies actually reject the presence of choice-induced dissonance in their subjects. This suggests that mere choice may not be enough to induce rationalization, a reversal that may significantly change the way we think about cognitive dissonance as a whole.
Chen was also written up in the New York Times last year.
Oh, and by the way, that was our second seminar of the day. Earlier we listened to Bob Lucas, whom the grad students brought in to give a major lecture. (First time I had met him.) He talked about his paper in the inaugural issue of the new AEA macro journal: “Trade and the Diffusion of the Industrial Revolution.” (There wasn’t actually much trade in it.) Lucas and I had a nice conversation at lunch about Jane Jacobs, who we agreed was fantastic. “She was a theorist!” was Lucas’s assessment. High praise.
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