Saturday, September 01, 2007

Worth a look or listen

Some recommendations from a bunch of content I consumed during recent travel.

The Black Swan by Nassim Taleb. I finally got around to reading this and recommend it highly. Physicists and others who are already familiar with nonlinear dynamics (chaos theory), the difference between Gaussian and power-law distributions, etc. will find the presentation slow and repetitious at times, but Taleb does have a lot of interesting insights. Particularly amusing: Chapter 10, The scandal of prediction, in which he recapitulates Philip Tetlock's results, chapter 17, which rails against the "Nobel" prize in economics, especially the one awarded to Merton and Scholes. I can't say I completely agree with Taleb on the (non)utility of modern finance theory. It's true that Gaussians underestimate the likelihood of rare events, but that is well known now and there are various ways to incorporate that into models (e.g., fat tails, stochastic vol). He's dismissive of these improvements in the book; it appears to me he's attacking a caricature from 10 years ago.

I also recommend a number of podcast interviews from the site Especially useful if you're going to be stuck on a plane, train or automobile. Some that I found especially good:

Taleb on the Black Swan (strange that the interviewer, an economist, didn't explore Taleb's extremely negative view of the profession! I guess they're both Hayekians so had some common ground :-)

Paul Romer on economic growth.

Ed Leamer on outsourcing and trade.

Vernon Smith on experimental economics.

Gregg Easterbrook on happiness and the American standard of living (we're 10x richer on average than 100 years ago!).

Bob Lucas on growth, poverty, monetary policy.


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Lab Rat said...

In the Taleb interview, I really enjoyed the part where Russ disclaims that he's an economist, and they toy with some alternate labels. My favorite was "empirical philosopher".

I definitely second the recommendation of Econtalk! By far the best podcast I've heard. Russ does an impressive job of guiding the interviews, and always demonstrates familiarity with the guest's work.

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