The Unassuming Economist

From a paper by James Mitchell, Taylor Shiroff, and Hana Braitsch:

“This paper shows how both the characteristics and the accuracy of the point and density forecasts from a well-known panel data survey of households’ inflationary expectations – the New York Fed’s Survey of Consumer Expectations – depend on the tenure of survey respondents. Households’ point and density forecasts of inflation become significantly more accurate with repeated practice of completing the survey. These learning gains are best identified when tenure-based combination forecasts are constructed. Tenured households on average produce lower point forecasts of inflation, perceive less forecast uncertainty, round their uncertainty but not their point forecasts, report unimodal densities, and provide internally consistent point and density forecasts.”

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From The Scotsman:

“Watching Chancellor Rachel Reeves’ maiden Budget and Mansion House speech, one thing was clear – this is a UK government focused on long-term economic growth.

Reeves’ plan to “invest, invest, invest”, and the provision of Scotland’s largest financial settlement since devolution demonstrates a clear government mandate to drive growth and boost investment both into and from Scotland.

This is a vision shared by the investment management industry, which channels some £1.4 trillion into the UK economy on behalf of households across the country. Our industry has a long heritage in Scotland. Edinburgh remains the second largest centre of investment management in the UK, managing £490 billion in assets, and the Scottish investment management industry employs about 13,000 people. Much to be proud of.”

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From a paper by Florian Huber, Massimiliano Marcellino, and Tommaso Tornese:

“We study the distributional implications of uncertainty shocks by developing a model that links macroeconomic aggregates to the US distribution of earnings and consumption. We find that: initially, the fraction of low-earning workers decreases, while the share of households reporting low consumption increases; at longer horizons, the fraction of low-income workers increases, but the consumption distribution reverts to its pre-shock shape. While the first phase reduces income inequality and increases consumption inequality, in the second stage income inequality rises, while the effects on consumption inequality dissipate. Finally, we introduce Functional Local Projections and show that they yield similar results.”

From a post by Matthew E. Kahn:

“I like Peter Coy’s new New York Times column and want to use it to discuss the climate change adaptation challenge.

Here is a direct quote from Coy;

“Knight’s thinking is as relevant now as it was in 1921, when “Risk, Uncertainty and Profit” was published. We still need tools for coping with uncertainty. Knight’s perspective can guide us to a middle course between trying to avoid uncertainty entirely, which is impossible, and plunging headlong into the darkness, which is reckless.

Knight has been forgotten or misconstrued repeatedly over the past century. A new book by the scholar Amar Bhidé brings back his original insights and dares to try to improve upon them — mostly by extending them into realms that Knight didn’t consider, such as the persuasive techniques that entrepreneurs use to overcome the uncertainty felt by investors, customers and partners.”

Peter Coy has not interviewed me about my work on Knightian Uncertainty applied to climate change adaptation. In my academic writing and in my 2021 book Adapting to Climate Change,“

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