10 Gadgets to Make Your Road Trip More Enjoyable

Gadling has a good list of gadgets to take on your next road trip:

ROAD TRIP! It doesn't matter whether the economy is making you pick the car over the plane, or that you just really like driving through this wonderful country - everyone needs some time away from home, and taking the car is a fantastic way to see more than you can from 35,000 feet.

I hadn't seen the Garmin Nuvi 855T before reading this and really like the looks of it's "Junction View". This shows you what road signs will look like where you need to turn. That would have saved me a couple of wrong turns on several trips.

I just took a road trip last weekend through five states (plus DC) and would add one more item to Gadling's list -- the Amazon Kindle 2. With it's text-to-speech feature, I was able to finish "reading" Tolkien's Return of the King on the trip -- alternating between actually reading it and listening to it. It made for a fantastic travel companion. What's also cool is that if you finish reading/listening to a book while you're still traveling, you can purchase and download your next one without worrying about finding an Internet connection.

My dad and I took a 30-day road trip across the country in 2005. Having GPS in particular would have made the trip much easier. (An MP3 player would have been nice too -- that was back in the days before I got my iPod.) Having said that, the important thing is to just get on the road. Technology may add marginal enjoyment/functionality to a road trip, but the biggest gain comes from just going. Gadgets might help make things more convenient and I certainly feel blessed to have the technology I have, but it is completely unnecessary to get out and have some fun.

The Big Mac Index

The Economist's guide to valuing currencies against the dollar:

WHICH countries has the foreign-exchange market blessed with a cheap exchange rate, and which has it burdened with an expensive one? The Economist's Big Mac index, a lighthearted guide to valuing currencies, provides some clues. The index is based on the idea of purchasing-power parity (PPP), which says currencies should trade at the rate that makes the price of goods the same in each country.

So if the price of a Big Mac translated into dollars is above $3.57, its cost in America, the currency is dear; if it is below that benchmark, it is cheap. A Big Mac in China is half the cost of one in America, and other Asian currencies look similarly undervalued. At the other end of the scale, many European currencies look uncompetitive. But the British pound, which was more than 25% overvalued a year ago, is now near fair value.

Reduce Traffic by Closing Roads?

Freakonomics:

The city of Vancouver has turned one lane of traffic on the busy Burrard Bridge into a bicycle route. Critics predicted chaos, but the first day of the experiment found traffic moving smoothly. This seems to be in line with recent studies suggesting that road closures actually lead to fewer traffic jams.

Economists Are the New Stars of the Blogosphere?

The Wall Street Journal has a great article on economists as the new stars of the blogosphere. Marginal Revolution and Greg Mankiw get good coverage, but somehow they left out Thinking on the Margin...

For many people, economics has never seemed so captivating, or so relevant. The enormous appetite for information and guidance right now is hardly a surprise: Even those with a basic knowledge of supply and demand have struggled to keep tabs on the global downturn...

The result is a watershed moment for economics bloggers, ranging from academics to armchair economists, who are all too happy to help readers fill in the blanks—or find a place to vent their frustrations. Traffic to the top sites, such as Marginal Revolution, Freakonomics and the blogs from academics such as Paul Krugman, Greg Mankiw and Brad DeLong, surged anywhere from 80% to 250% from July to September 2008 as the financial crisis intensified, according to Compete.com, a Web site that measures Internet traffic. The most popular blogs can attract as many as 50,000 to 100,000 page views a day.

Read the whole thing.

P.S. -- Here is a guide to the econ blogosphere.

(HT Tyler Cowen)

When Game Theory Isn't Enough, Try Institutions!

Fabio Rojas:

Game theory is a strange thing. On the one hand, there are deep results – every finite game has a Nash equilibrium. On the other hand, there’s a fundamental ambiguity about these deep results: you might have mutliple equilibria.

There are two solutions to this issue. The first is to define more sophisticated equilibrium concepts. This is usually a problem in applications in that it’s often very hard to convince yourself that typical people will actually find solutions in that way. If your grad students have problems solving the game, then how will your grandma figure out the perfect Bayesian equilibrium?

The second solution is to go beyond traditional game theory. For example, one might view life in evolutionary terms. Poor strategies are weeded out, survivors converge on the strategies predicted by some fancy solution concept.

But here’s my favorite way to get beyond game theory 101 ambiguities – institutions. Let’s say some common interaction has multiple equilibria, some of them bad. Then people can set up rules that force particular outcomes. The skeptics might retort “free riders,” but I don’t see that as a huge problem. There’s often someone who has a disproportional stake in the game and is willing to invest the time and energy to monitor the game. Some people seem to have a taste for creating and enforcing rules, the traditionalists in any society.

The skeptic might say that I’ve just created a bigger, more complicated game – a game about the institution’s creation, then a game about enforcement, then the original game. True, this is more complex, but conceptually it’s just a chain of simple games. It’s easier for me to believe that people work at solving each game via simple solution concepts and try to make them fit together (often unsuccessfully), rather than invoke some very esoteric solution concept.

Irony

I took a road trip to Pennsylvania this weekend and snapped this picture along a random country road. The irony of seeing a clothing donation box outside this kind of bar was too good to pass up.

Keeping Animal Spirits Alive

(click on chart for larger view)

Greg Mankiw (emphasis mine):

This chart from Andrew Biggs "shows spending on veterinary care, which I pulled from the Consumer Expenditure Survey, and national health expenditures (for people) from the National Income and Product Accounts.... the rate of growth of spending from 1984 to 2006 wasn’t all that different—and in both cases, spending grew faster than the rate of economic growth. As new technologies are developed for humans, we adopt them for Bowser and Fifi—because we can afford to and we think it’s worth it."

These data are consistent with what I wrote a couple years ago: "The reason that we spend more [on healthcare] than our grandparents did is not waste, fraud and abuse, but advances in medical technology and growth in incomes. Science has consistently found new ways to extend and improve our lives. Wonderful as they are, they do not come cheap. Fortunately, our incomes are growing, and it makes sense to spend this growing prosperity on better health."

Justin Fox on the Rationality of Markets

EconTalk:

Justin Fox, author of The Myth of the Rational Market, talks about the ideas in his book with EconTalk host Russ Roberts. Fox traces the history of the application of math and economics to finance, particularly to the question of how markets and prices process information, the so-called efficient markets hypothesis in its various forms. The conversation includes discussions of systemic risk, the current financial crisis and the lessons for policy reform.

See related links and listen to the podcast here.

The Geography of a Recession

Catherine Rampell:

O.K., some of you complained about the clarity of the county-by-county unemployment slideshow (from the Federal Reserve Bank of St. Louis’s GeoFRED site) that I posted last week.

So: For your viewing pleasure, here’s a Times-made, interactive version, showing seasonally unadjusted unemployment rates around the country in May 2009. Many thanks to the Times graphics editors for this useful tool.

Design Floor Plans With Excel

Lifehacker:

Rather than spend money on a commercial tool for designing floor plans, interior design, or laying out your landscaping, you can tweak Microsoft Excel to make an adequate replacement.

The PC Magazine web site writes up how to tweak Excel to make it look more like a sheet of grid paper, which you can then add colors and borders to easily lay out your design. To create your own Excel grid paper, use Ctrl+A to highlight the entire worksheet, set the Column Width to 1, and the Row Height to 9. Once you've done so, you can continue filling in the squares with colors, borders, text, and anything else you would like.

For more, check out how to save time with Excel's double-click tricks, use Excel to keep a log for your job search, or figure out how much money you need to retire.

Use Excel as an Architectural Design Tool [PC Mag]

The Kindle 2 Just Got Cheaper

James Kendrick:

Amazon has lowered the Kindle 2 price from $359 to $299, as the company looks to push more of its small e-book readers out the door. The newest Kindle, the larger DX, remains priced at $489, and Amazon expects to start delivering them in three to five weeks. The Kindle 2 is shipping now.

Kindle books now count for a full 35 percent of Amazon’s book sales, which works out to about two Kindle books per device sold per month. It would appear that e-books are here to stay, given these huge sales numbers.

Hopefully this means the price of the Kindle DX will drop soon as well -- although probably not as long as Amazon keeps selling out of them. My guess is that the DX sales have diminished Kindle 2 sales and so now Amazon is trying to boost Kindle 2 sales by lowering its price. My advice is that unless you need to read PDFs and/or textbooks, go with the Kindle 2.

John Calvin As Behavioral Economist?

Tyler Cowen:

Tomorrow marks the 500th birthday of John Calvin. If you read John Calvin you will find a great deal of what we now call behavioral economics.

He wrote about non-convexity:

For there is no medium between the two things: the earth must either be worthless in our estimation, or keep us enslaved by an intemperate love of it.

Here is one reason why there is "evil" in the world:

Whatever be the kind of tribulation with which we are afflicted, we should always consider the end of it to be, that we may be trained to despise the present, and thereby stimulated to aspire to the future life. For since God well knows how strongly we are inclined by nature to a slavish love of this world, in order to prevent us from clinging too strongly to it, he employs the fittest reason for calling us back, and shaking off our lethargy.

Adam Smith and David Hume were influenced by Calvin:

If we see a funeral, or walk among graves, as the image of death is then present to the eye, I admit we philosophise admirably on the vanity of life. We do not indeed always do so, for those things often have no effect upon us at all. But, at the best, our philosophy is momentary. It vanishes as soon as we turn our back, and leaves not the vestige of remembrance behind; in short, it passes away, just like the applause of a theatre at some pleasant spectacle. Forgetful not only of death, but also of mortality itself, as if no rumour of it had ever reached us, we indulge in supine security as expecting a terrestrial immortality.

It is odd to call someone so famous an "underrated thinker" but indeed Calvin is. You'll find the whole text of the Institutes of Christian Religion here; it makes for good browsing.

This chapter is John Calvin imitating Robin Hanson.

Buy the book here on Kindle for 99 cents.

The Problem With Modeling Empirical Data

(HT Economix and xkcd.com)

Alfred Hubler's Physics Lab

While at the Santa Fe Institute, one of the things we experienced was going through Alfred Hubler's physics lab -- learning about the physics of nonlinear dynamics. It was a ton of fun, highly educational, and the first time I'd been in a lab in many years.

Below are a few photos from the lab. See many more here or watch them as a slideshow.

Love Life, Not Stuff

Leo Babuta on a lesson that I know, but have to repeatedly learn:

Our obsession with stuff has become unhealthy. When we have a void in our lives, we buy things. When we have problems, we buy things. And these things are becoming more and more expensive, bigger, shinier … more wasteful.

This obsession with stuff leads to owning a lot, having a lot of clutter … and yet this stuff doesn’t fill our lives with meaning.

It leads to deep debt, from buying so much, and needing bigger houses and storage spaces to contain everything. Financially, we’re worse off than ever, because of this obsession with stuff.

We buy things when we’re depressed, we buy things for others to show how much we love them … and in this way, stuff has separated us from actually dealing with our emotions, blocked us from truly connecting with others.

Let’s replace that lust for stuff with a lust for life.

Follow the link for ideas on how to tackle this.

Elsewhere, read about stress, stuff, and world travel -- the not so secret connection.

The Holy Grail of Ultralight Travel?

I just returned from a month in Santa Fe, traveling with nothing but what could fit into my carry-on luggage. I still feel like I brought too much. Here is a good article on how to travel for six-weeks with only 15 pounds of luggage:

Is it possible to travel for six weeks with 7 kilograms of luggage in one small bag? I’m a person who takes a bootload of gear for a weekend away but on a recent 40-day trip to nine European countries I achieved the light traveller’s Holy Grail.

It took lots of planning but it was worth it. I was smugly self-congratulatory as my bag measuring 45cm x 30cm x 18cm and I fitted unobtrusively into crowded trains and buses; as I effortlessly tossed it onto luggage racks; as I bypassed taxi queues to stride easily through city streets; as I unpacked and repacked in five minutes flat. Not once did I wish I had brought more stuff…

Travelling light makes you feel independent, liberated and, well, superior. But it takes a stern approach and a willingness to accept strict limitations in your attire. Here are 10 steps to success.

Read the whole thing, including a recommended packing list.

While I can claim to have mastered the art of traveling small (I made it to all 7 continents without checking a bag), I am still working on the art of traveling light. The three things things that killed my weight on this last trip were: 1) bringing two textbooks, 2) two laptops (one of them being my netbook), and 3) my DSLR camera. If I had to do it over again, I would have left one (or both) of the textbooks and my netbook at home. (I was in Santa Fe for summer school studying complex systems at the Santa Fe Institute and needed more computing power than my netbook could provide.) On this trip, however, my dSLR was worth its weight in gold through a combination of quick-shooting, great picture quality, and incredible battery life. I'd be hard pressed to leave it at home for future excursions. (I'd love to get my hands on a Canon G10 at some point and see how well it would work as a dSLR substitute.)

(HT One Bag, One World)

Rafting Down the Rio Grande

A photo of our group after two hours of whitewater rafting down the Rio Grande River. See more of my photos here or watch them as a slide show.


(click image for larger size)

You can see photos of me in action in the raft (in the middle on the right) here, here, here, here, here, here, and here.

I'm very sad to be leaving Santa Fe tomorrow. The past month has been such a fantastic experience intellectually, socially, and experientially -- I hate to see it end. It will be tough saying good-bye to everyone tonight.

How the Market Influences What Language You Read In

Daniel Hamermesh:

My Dutch friends tell me that they read foreign (non-Dutch) novels that are translated into English rather than into Dutch.

Their English is very good, but their Dutch is clearly better. So, I ask, why read in English?

Their answer is simple: take a book originally in Swedish, like Stieg Larsson’s wonderful Girl With the Dragon Tattoo. If somebody translates it into Dutch, the relatively small number of Dutch-speakers means that the market for the translation will be much smaller — and the royalties and profits smaller too — than the market for an English translation.

These smaller returns attract translators who are not as good as those attracted into translating a book into English; the supply curve of translators is upward-sloping.

My friends say they would rather read a good translation into a language they know well, but not perfectly, than a mediocre translation into their native language.

Rodeo Photos

Here are some more pictures I took at the Santa Fe Rodeo last week. See many more here or watch them all as a slideshow.

It Takes A Free Market To Build A Toaster

Freakonomics:

It takes a lot of people to manufacture even the simplest products, so making a household appliance on your own shouldn’t be expected to be easy. It may even be impossible. That’s what the artist Thomas Thwaites is finding as he tries to make a toaster from scratch, traveling around the world to collect raw materials and refining his own petroleum for plastic moldings. Aware that he still won’t be able to accomplish his task without the help of modern appliances, like a microwave, Thwaites claims his experiment points to the “helplessness” of the modern consumer. At Reason Online, meanwhile, Radley Balko argues that our inability to make a toaster doesn’t mean we’re helpless at all, but rather that we’ve been liberated by free markets. (This is hardly a new argument; consider the pencil, and similar tales.)

People who argue modern consumers are helpless typically argue we ought to live in a world of some form of individual autarky, where we are able to make/grow/produce everything on our own. This completely misses the insight of gains from trade and the associated benefits of division of labor, specialization, etc.. Without understanding that they are doing so, what they are actually arguing for is that we all live in poverty.

Nothing is stopping people from living a more simple lifestyle of self-production in the US. The fact that very few people chose to do so ought to tell you something.

The Big Five Personality Test

Here's how I scored:

	Your Results
Closed-Minded		Open to New Experiences
Disorganized		Conscientious
Introverted		Extraverted
Disagreeable		Agreeable
Calm / Relaxed		Nervous / High-Strung

Openness to Experience/Intellect
	High scorers tend to be original, creative, curious, complex; Low scorers tend to be conventional, down to earth, narrow interests, uncreative.
		You enjoy having novel experiences and seeing things in new ways.	(Your percentile: 80)
Conscientiousness
	High scorers tend to be reliable, well-organized, self-disciplined, careful; Low scorers tend to be disorganized, undependable, negligent.
		You are neither organized or disorganized.	(Your percentile: 58)
Extraversion
	High scorers tend to be sociable, friendly, fun loving, talkative; Low scorers tend to be introverted, reserved, inhibited, quiet.
		You are extremely outgoing, social, and energetic.	(Your percentile: 93)
Agreeableness
	High scorers tend to be good natured, sympathetic, forgiving, courteous; Low scorers tend to be critical, rude, harsh, callous.
		You are good-natured, courteous, and supportive.	(Your percentile: 94)
Neuroticism
	High scorers tend to be nervous, high-strung, insecure, worrying; Low scorers tend to be calm, relaxed, secure, hardy.
		You probably remain calm, even in tense situations.	(Your percentile: 7)

Read more about the test here or try taking it yourself.

The Dark Theorem of Economics

Tyler Cowen:

Christopher J. Ayres sends me a paper.with the following abstract:

I begin by proving the "Dark Theorem of Economics," from which it follows that the foundations of economic theory rely on the Axiom of Choice (AC). All current solution concepts in game theory
also require the theorems implied by AC. In particular, lexicographic utility, lexicographic probability, the real line being well-ordered, and the existence of a universal space are all equivalent to AC; therefore any argument to disprove their existence must be false. Any proofs using properties that fail under AC must be redone. The concept of Nash Equilibrium becomes either a tautology (in the absence of AC) or violates rationality (in the presence of AC); we provide an example demonstrating this. Knowledge, Common Knowledge, Epistemics, Game Theory, and Macroeconomics (through the failure of Rational Expectations) must be rebuilt. Any economics …field or concept relying on these must also be rebuilt. I begin this process with the de…finition of "Fundamental Game."

I joked with Chris that the other people who pursued this line of inquiry met with unfavorable ends. But that doesn't mean he is wrong. Fortunately, I am a pragmatist when it comes to the foundations of economic theory or lack thereof. It's hard enough to define what a number is, so if you push on the foundations of micro theory, don't expect a completely comfortable journey.

The Santa Fe Rodeo

Here's a shot I took at the Santa Fe Rodeo last Wednesday. More pictures coming soon.

Financial Timeline

Economix:

For those trying to sort out how we got from there to here, the Federal Reserve Bank of New York has put together two exhaustive timelines for the financial crisis. One focuses on domestic events, and the other international. Links are here and here, respectively.

Most items on the timelines link to the original news story or news release regarding that event or announcement.

The international one is even color-coded. Follow the purple text, for example, to see how Canada alone responded to the crisis.

Why Do Chinese Save?

Because the boys want to marry:

The high Chinese savings rate has been one of the wonders of the world. The household savings rate, as a proportion of disposable income, is 30 percent, and has been rising rapidly in recent years. That figure is twice as high as the highest rate ever recorded in the United States.

Traditional explanations for varying savings rates, such as life cycles — working age people save more — and income uncertainty, do not help much in explaining the rapid rise in China.

Now two economists say they have found a reason that explains a large part of the increase. China has too many boys...

The authors note that while they looked only at China, “other economies known to have a strong sex ratio imbalance include Korea, Taiwan, Hong Kong, Singapore and India. These countries also happen to have high savings rates.”

Read the working paper here.