Giving new meaning to the term “academic scribbler”

It was amazing to me when we first moved to Mexico how much the average person knew about exchange rates and inflation.  Compare this to a class of American undergrads, where you have to explain in detail what inflation is and why it matters.

Even knowing this, I was still surprised at the fact that there is monetary policy graffiti in the state of Oaxaca, Mexico!  David Harrison, reporter on monetary issues for the WSJ, tweeted this yesterday:

screenshot-2017-02-20-19-21-48

 

 

This roughly translates to “and they raised interest rates, making credit more expensive.” Impressive.  So not only is the graffiti pretty high brow, they also get the economics right. Nicely done.

 

Go on, take the money and run….to Stanford?

So Peru announced a 100,000 Soles bounty on the head of that desperado, Alejandro Toledo, its president from 2001 to 2006, who’s accused of taking in millions in bribes while in office.

Some observations:

That’s about $30,000 making Toledo 1/833 as evil as Saddam or Bin Laden ($25 million).

Toledo is an unpaid “visiting scholar” at Stanford with an office and library privileges so it shouldn’t be too hard to find him.

If he really has $20 million in ill-gotten booty, couldn’t he just offer $31,000 to NOT capture him?

Is the government of Peru unaware that they have an extradition treaty with the USA (since 2001 ironically enough)?

Since I was once mistaken for Toledo by a crowd of Peruvians in 2000, this whole situation has me marginally more jittery than usual.

These kinds of prosecutions are often just political payback and posturing, but in this case the ex CEO of the bribing company is directly saying they bribed Toledo.

Maybe Alejandro could get the cell next to Fujimori??

 

 

Leggo my Ego (Morales)

Ah Evo.

Who can forget his “signing” as a pro player by a Bolivian soccer club in 2014?

And of course there’s his new “Evo Museum” built for $7.1 million in his home town of Orinoca (population 900) and dedicated to his life. This has been in the works since 2006, as it was one of Evo’s first acts as president to commission his museum.

Usually, you don’t build the “presidential” library until after you are no longer president. But as far as Evo is concerned, that’s not happening anytime soon. Already on his supposedly impossible (according to the constitution) 3rd term, Evo is still planning on running and winning a fourth term in 2019. This despite last year’s referendum where voters rejected his bid.

“Now, Morales is trying to invalidate the referendum claiming that the opposition had won because of false news reports, and is seeking new ways to reform the constitution to be able to run for a fourth term. He was recently quoted by the daily La Razon online as saying — using a soccer analogy — that the 2016 referendum was only “the first half” of the game and that there will be a “second half.””

When I was born for the 7th time

Very cool new paper in the AEJ Applied.

Here’s the abstract:

Political favoritism affects the allocation of government resources, but is it consequential for growth? Using a close election regression discontinuity design and data from India, we measure the local economic impact of being represented by a politician in the ruling party. Favoritism leads to higher private sector employment, higher share prices of firms, and increased output as measured by night lights; the three effects are similar and economically substantive. Finally, we present evidence that politicians influence firms primarily through control over the implementation of regulation. 

I love these kind of quasi-experimental papers! I preach/teach this approach to all who will listen (or are forced to pretend to listen).

Here’s a link to a working paper version.

A few comments.

“Favoritism leads to” is a bit of false precision. “Just barely electing the ruling party candidate vs an opposition candidate” is probably more accurate.

What are we supposed to think here, that the ruling party does this for all districts? Or that, having won a district they didn’t think they would, they invest at the margin to try and make it more secure?

Is this happening because the ruling party is favoring the barely won constituency or because it is punishing the barely lost constituency (or a combo of both)?

Do these kind of effects depend on how competitive the overall elections are? If say Congress has 70% of the districts, would this be happening? In other words, how generalizable is the finding.

These comments probably seem critical, but I would have pushed the “accept” button if I’d refereed the piece.

And here’s the “money shot” from the piece:

screenshot-2017-02-09-08-08-53

 

Looks like they punish the closely lost districts, no? or low growth is serially correlated and low growers vote for the opposition?