Tyler Cowen is the Shiva Nataraja of economists--eight arms at least, and always unwilling to say that issues are settled for certain for there is always an "on the other hand." He says he has learned four new and surprising things:
So We Thought. But Then Again: Here are a few of the things we learned in the last 12 months:
REVISING THE CHINESE ECONOMY Many of the prices in China had not been accurately measured since the late 1980s; in 2007, new data indicated that food, rent and other items had become a lot more expensive than had been accounted for in official measurements. Higher prices, of course, mean lower Chinese real wages and a smaller size for the Chinese real economy.... China has 300 million workers — about the size of the entire United States population — earning less than a dollar a day....
IT’S NOT JUST THE LENDERS There has been plenty of talk about “predatory lending,” but “predatory borrowing” may have been the bigger problem. As much as 70 percent of recent early payment defaults had fraudulent misrepresentations on their original loan applications.... Many of the frauds were simple rather than ingenious.... Too often, mortgage originators and middlemen looked the other way rather than slowing down the process or insisting on adequate documentation....
IN MUSIC, HARDWARE RULES In 2007, album sales fell 15.3 percent.... Even if sales of 10 singles are counted as one album, sales were still down 9.5 percent. Economists... thought that greater exposure to music and the ease of online access might lead people to buy more. But in 2007 the outcome became clear: people tend to buy their favorite song from an album, online, rather than buy the whole album.... When it comes to piracy, illegal file-sharing on computer networks is not the main problem; instead, computer users, especially teenagers, burn CDs for one another. The music companies don’t have a good business model for making money from this...
LETHAL COLD FRONTS Spells of extreme cold kill over 27,000 Americans each year.... [D]ays with an average temperature below 30 degrees... have more significant and longer-lasting effects on human mortality.... Extreme cold brings cardiovascular stress.... Heat waves tend to kill people who were already weakened and would have died soon anyway; cold periods bring additional people to the verge of death.... 8 to 15 percent of the increase in American life expectancy over the last 30 years comes from people moving to warmer climates, according to research done by two economics professors, Olivier Deschenes at the University of California, Santa Barbara, and Enrico Moretti, at the University of California, Berkeley....
Many major debates of economics remain unsettled.... Knowledge is a wonderful thing, but sometimes simply knowing what we don’t know is a form of understanding. So beware the one-armed economist; sometimes a good economist could use two or even three arms or more.
I think only three of these are new and surprising--"it's not just the lenders" seems to me to be mischaracterized, and not to carry the implications Tyler wishes us to drawn from it.
