Four papers and a movie for PhD-students (and professors too!)

This post is for PhD-students in Economics, bored with the micro, macro and econometrics courses they serve you during the first year. I suggest you start a study group, meet four times and discuss each of the four papers below. They will for sure will provoke some discussion, and thinking about the issues they deal with will make you a better economist.  

From Econ Journal Watch

1. David R. Hakes: Confession of an Economist: Writing to Impress Rather than Inform

Think back to your first years in graduate school. The most mathematically complex papers required a great deal of time and effort to read. The papers were written as if to a private club, and we felt proud when we successfully entered the club. Although I copied the style of these overly complex and often poorly written papers in my first few research attempts, I grew out of it quite quickly. I didn’t do so on my own. I was lucky to be surrounded by mature confident researchers at my first academic appointment. They taught me that if you are confident in your research you will write to include, not exclude. You will write to inform, not impress. It is with apologies to my research and writing mentors that I report the following events.

2. From Journal of Socio-Economics, Ziliak and McCloskey, “Size Matters: The Standard Error of Regressions in the American Economic Review” (or their first 1996 article in JEL). 

The Ziliak & McCloskey argument has triggered a lot of debate, some collected here, and also in EJW by Thomas Mayer.

3. From the American Economic Review, David Albouy's comment on Acemoglu, Daron, Simon H. Johnson, and James A. Robinson. 2001. “The Colonial Origins of Comparative Development: An Empirical Investigation.” There are many good quotes here, such as

With the many rates available in the sources, there are many other alternatives to benchmark the data, but AJR (p. 1383) claims that “alternative methods produce remarkably similar results.”6 As I document in my Appendix, alternative methods in fact produce remarkably dissimilar results, most of them lower.

See also the response from AJR here and here.

4. Any paper that applies a public choice perspective on central banking. I suggest CENTRAL BANKING AND THE FED: A PUBLIC CHOICE PERSPECTIVE by Richard E. Wagner. An excerpt:

the fractional reserve system of banking requires the government to share the seigniorage from monetary expansion with commercial banks. And the lower the required reserve ratio, the greater is the share captured by commercial banks. Recognition of this sharing of seigniorage raises the possibility that the Fed represents not just a means of increasing taxes but also a method of cartelizing what would otherwise be a competitive banking industry.

NB: this was published 1986!

Finally, wrap up by watching Inside Job (review in the Guardian), or read the transcript. 

SEN. CARL LEVIN: Is there not a conflict when you sell something to somebody, and then are determined to bet against that same security; and you don't disclose that to the person you're selling it … Do you see a problem?

LLOYD BLANKFEIN: In the context of market-making, that is not a conflict.

SEN. CARL LEVIN: When you heard that your employees, in these e-mails, said, god, what a shitty deal; god, what a piece of crap; do you feel anything?

DAVID VINIAR: I f-, I think that's very unfortunate to have on e-mail.