Olan Biten

I have been a little puzzled by how dominant certain views about inflation are. The quantity theory of money seems to be dominating a lot of circles, in some cases contrary to their own interests and contradicting their claims on other issues. Most descriptions of inflation outside economist circles try very hard to reduce it to a policy mistake (well, you see and hear this in our field too), a one-time event, etc. and I don't think they have bad intentions or an interest in doing so necessarily. "X caused Y" sells! Yet these stories take themselves so seriously that they sometimes seem to forget the definition of inflation and reduce it to changes in demand only. As always, this is a place where I feel like playing with some data and analytical models to throw out some ideas. Below, I'll run some simulations in a two-sector economy, without considering the accuracy of the analysis. Production Networks My starting point will be the commonly used production function in...

 In his "Foundations of info-metrics: Modeling, Inference, and imperfect information," Amos Golan suggests a multi-parameter model for making inferences about firm size distribution. The motivation is providing an example for cases where the available information we have about the system is insufficient for very exact inference. Such problems are widespread in social science, so I believe it is instructive to follow this simple example. Accordingly, we have a country, Uniformia, where the only information we have about the country is they produce a single output with ten different sizes of firms. This is a very typical case since governments rarely make these micro-level data available, concerned with the privacy of their constituents. Golan models the firms with a simple approach: for input X and output Y, the production function for the firm of type A may be y_A = f_A (x_A). So different firms with the same amount of inputs may still differ in their outputs since their prod...

The World Inequality Report (2022) (WIR-2022) is out and has already gained much attention. The report includes chapters on global income and wealth inequality, environmental inequalities and inequalities through women's perspectives, and international tax policies. They were nice enough to share some aggregates they have calculated, together with the descriptions of their methodologies. I felt like exploring the data a little bit. An Unequal World I feel responsible for starting with emphasizing a first observation WIR-2022 made: "We live in a data-abundant world, and yet we lack basic information about inequality." Not only do we live in a data-abundant world, but also with an abundance of people trained in statistics, able to use software and ask interesting questions, yet we can't utilize neither effectively. Highly restricted access to data (and publications for the same reason) constitute a massive obstacle in front of our field's development. According to ...

I saw a tweet that says “a bit tough being a marxist in kuwait because nothing here makes f*cking sense and marxism is a science” and wanted to share some thoughts about these matters. Stratification of the World-Economy Subsection headline indeed refers to the Arrighi & Drangel (1986) piece (AD 1 from now on). They came up with a theoretical and empirical investigation of the semi-periphery: Wallerstein brings up the concept, with some ambiguities while the modernization theory would see what could be thought as semi-periphery as a transitional state and the dependency theory would see it as residual. I’m no expert in this literature, so I will follow the AD explanation: Wallerstein’s world is structured in core-periphery relations, yet, unlike the dependency theory where national and regional economies are connected, these relations connect economic activities structured in commodity chains that cut across state boundaries. “All states enclose within their boundaries both co...

I need to begin with stating I’m not trained neither in urban nor in environmental studies, yet as a true economist, I will use the liberty of talking about things I’m not educated about. In this case, I believe my attempt is legitimized for two reasons, first, main argument I want to make has to do with the ways in which we use models, not necessarily on the environmental catastrophes and self-organization of cities. Second, this is just a simple blog post where I will intentionally avoid necessary steps to show the validity of the model for the example I will discuss. Thus, I do not claim the proposed model has any explanatory power anyway. You may have come across to the nasty photos of the Sea of Marmara, an inner sea between the Black Sea and the Aegean Sea. What is believed to be a natural phenomenon, sea snot, seem to have built up uncontrollably both on the shores and on the bottom part of the sea, seriously threatening the sea life. According to a BBC article 1 , it was firs...