1) This Raj Chetty study on Social Capital: The share of high-SES friends among individuals with low SES—which we term economic connectedness—is among the strongest predictors of upward income mobility identified to date. I haven’t figured out how likely this is to be causal yet, please don’t assume that this is definitely mostly a causal effect. Here is a useful
There is nothing at all in the Chetty stuff that even implies causation, let alone gives evidence for it. It mostly tracks racial segregation, which obviously may itself cause serious problems, but Chetty gives us no extra reason to judge that cross group FRIENDSHIPS are the reason that segregation is bad (or indeed that segregation itself is the problem).
I think the crux of the disagreement here is in the degree to which household economising can be depended on to insulate individuals and the economy from the energy shock. The Economist piece explicit argues that 'households and industry will adapt more to higher prices', but I incline to the position that really there's nothing households can do to respond to these insane signals - the degree to which people would need to cut back to rationally economise would kill them. Cf. https://twitter.com/thhamilton/status/1563886341275926528?t=wlPYpgR_lC3pNIgoLs93wA&s=19
What did you make of this extract from the Economist article? I haven't read the study referenced but this at least makes me slightly more receptive to idea that price signal will still make a meaningful difference even if prices are totally mad.
"California’s price changes were small compared with those Europe is facing. How households respond to enormous price shocks has rarely been studied, owing to a lack of real-world data. One exception is that produced by Ukraine, which Anna Alberini of the University of Maryland and co-authors have studied, looking at price rises in 2015 after subsidies were cut. They found that among households that did not invest in better heating or insulation a doubling of prices led to a 16% decline in consumption."
On the Times piece about education and Akala's response, the link doesn't work for me (it doesn't even go to a paywalled article, it just goes to the Times homepage) - is the tl;dr just 'black African kids have better outcomes than black Caribbean kids'? Seems like there's a deeper discussion there that Akala is responding to/criticising.
[EDIT: have just seen someone linking it below]
It's maybe worth saying that there's a pretty similar phenomenon in the US, where more recent immigrants from African nations are able to climb the social ladder relatively quickly with second-gen immigrants being relatively wealthy, whereas black Americans who are descended from chattel slaves ('African-Americans') are still incredibly poor. This both adds to Akala's point (African-Americans and black Caribbean Britons don't have the same culture, so it's suspect to rely on culture in both cases!) and makes the phenomenon a lot more mysterious.
I think it's a worthwhile to remember that both black Caribbean Britons and most African-Americans should maybe be considered (nth-generation) *internal* migrants - in the former case, they migrated internally within the Empire, which just happens not to exist any more; in the latter case, this is well-known as the Great Migration. The difference in incentives and pressures on (nth-generation) internal migrants and those on (nth-generation) immigrants might tell us something about the differences between black Caribbean and black African experiences.
There is nothing at all in the Chetty stuff that even implies causation, let alone gives evidence for it. It mostly tracks racial segregation, which obviously may itself cause serious problems, but Chetty gives us no extra reason to judge that cross group FRIENDSHIPS are the reason that segregation is bad (or indeed that segregation itself is the problem).
Also, for what it's worth, against the Economist piece here's Duncan Weldon arguing that price signals have done about all they can do and rationing is basically inevitable if the government wants to avoid a truly massive recession: https://duncanweldon.substack.com/p/in-the-bleak-midwinter?utm_source=substack&utm_medium=email
I think the crux of the disagreement here is in the degree to which household economising can be depended on to insulate individuals and the economy from the energy shock. The Economist piece explicit argues that 'households and industry will adapt more to higher prices', but I incline to the position that really there's nothing households can do to respond to these insane signals - the degree to which people would need to cut back to rationally economise would kill them. Cf. https://twitter.com/thhamilton/status/1563886341275926528?t=wlPYpgR_lC3pNIgoLs93wA&s=19
What did you make of this extract from the Economist article? I haven't read the study referenced but this at least makes me slightly more receptive to idea that price signal will still make a meaningful difference even if prices are totally mad.
"California’s price changes were small compared with those Europe is facing. How households respond to enormous price shocks has rarely been studied, owing to a lack of real-world data. One exception is that produced by Ukraine, which Anna Alberini of the University of Maryland and co-authors have studied, looking at price rises in 2015 after subsidies were cut. They found that among households that did not invest in better heating or insulation a doubling of prices led to a 16% decline in consumption."
Thanks for the inclusion.
On the Times piece about education and Akala's response, the link doesn't work for me (it doesn't even go to a paywalled article, it just goes to the Times homepage) - is the tl;dr just 'black African kids have better outcomes than black Caribbean kids'? Seems like there's a deeper discussion there that Akala is responding to/criticising.
[EDIT: have just seen someone linking it below]
It's maybe worth saying that there's a pretty similar phenomenon in the US, where more recent immigrants from African nations are able to climb the social ladder relatively quickly with second-gen immigrants being relatively wealthy, whereas black Americans who are descended from chattel slaves ('African-Americans') are still incredibly poor. This both adds to Akala's point (African-Americans and black Caribbean Britons don't have the same culture, so it's suspect to rely on culture in both cases!) and makes the phenomenon a lot more mysterious.
I think it's a worthwhile to remember that both black Caribbean Britons and most African-Americans should maybe be considered (nth-generation) *internal* migrants - in the former case, they migrated internally within the Empire, which just happens not to exist any more; in the latter case, this is well-known as the Great Migration. The difference in incentives and pressures on (nth-generation) internal migrants and those on (nth-generation) immigrants might tell us something about the differences between black Caribbean and black African experiences.
Times link https://archive.ph/eQqRb
Also FT https://archive.ph/zPpgu