I made an error with the bilateral data yesterday and underestimated the number of observations in my project. I have 150 countries, so in a bilateral dataset, thats 150*150-150=22,350 country pairs. each pair can theoretically export 772 goods, which means my bilateral trade dependent variable for one year is 17.2 million. I have 5 years of data which means i should have 86.2 million observations. wow…

Country extensive margin — how important is it? from HMR, probably not very. I should investigate this later tho…

Great article by Arlyn dela Cruz, herself a kidnap victim. She details her involvement in this most recent kidnapping, and her relationship with Ces Drilon.

Last batch of regression replications. The magnitudes are a bit different from the big paper, but the signs are correct. Basically, the product space variables can predict what goods a country exports…

As part of my empirical prep, i tried to (roughly) replicate one regression in this WP. Trying to replicate should be part of every program, and i am saddened at the fact that i was not asked to replicate in any of our classes. At the very least, i was able to confirm the basic message of the paper, while at the same time question my own understanding and exercise some old fashioned doubt.

The point: each good has a ‘value’ associated by the development of the countries that specialize in them. The ‘value’ of the country’s export basket is called ExpY. The theory says that if you look at value of the export basket of a good is high, the country will exhibit subsequent economic growth.

The first practical lesson is that i coded the log of ExpY incorrectly. The numbers were too huge compared to the paper. The correct range should be from 7 to 10, in natural log scale. the regression coefficient, controlling for log of initial income is 0.4 — since a standard deviation of lnExpY is around .4 also, a country moving 1 standard deviation up will experience an increase of 0.16 in its growth rate, (simple growth rate).

Looking at the graph, you may this is making a mountain of a molehill, but the y axis is squeezed– a value of 2 is basically a doubling of real GDP per person (source, PWT 6.2). To make a more attractive graph, i log transformed growth, and the fitted line is more noticeable upward sloping:

Using sitc4, the exporter and import fixed effects are strange, but using the shared data, the specification works…

With the original data, the signs of the regressors are sometimes wrong, if we don’t include exporter and importer dummies. This implies inherent heterogeneity in the data in terms of average trade volume. That makes total sense.

Arghh! my three year old bike got stolen! Arghhhhh! Luckily i have a road bike, which i will now nail down to the ground everytime i use it.

A fan of the show will enjoy this movie, as i did. Three of the main characters traveled through familiar arcs for 2 hours, with the exception of charlotte, who exists here, as in most of the series, to remind us of the romantic ideal — she’s got her dreams fullfilled by the end of the show, and the movie gives her character icing on the perfect cake that is her life, a ‘deux ex machina’ of miraculous proportions. Other than that, her role is comic, and is lovingly brought down (poop jokes, anyone?) for a good chunk of the movies’ long middle of Carrie’s recovery.
I appreciate Mr. King’s ending for Samantha. The logic of the character dictates that it ends. Presumably, one can imagine a different ending, but i for one am glad they stuck to she stuck to her identity, as a good archetype would.

Samantha’s story is part of the movies’ central theme. As i’ve noted elsewhere, the thematic nature of the show is characteristic of Sex and the City. Many a critic has said that the theme is forgiveness, and they would be right. But to this, something must be added, which i believe is larger and more interesting: the folly of labels. Throughout the movie labels were bandied about, and not just the clothes and the bags, but for relationships and people. From boyfriend to ‘manfriend’, from cheater to wife… the movie is full of labels that we’d love and/or hate to attach to ourselves and to other people. Samantha hated the label of ‘woman who live for a man’, while Big hated the ceremony of a Vogue labelled wedding. By the end, the movie suggests that we get hurt when others reject the labels we force on others. And when other people ask for forgiveness, we ultimately grant it when we see through the labels to glimpse at the real treasure underneath.

I’m surprised many critics hate the superficial nature of Carrie, her selfishness, when it is exactly this point that the movie (and the TV show!) is trying to address. The TV show is extremely conservative, and its asking its viewers to look beneath labels to the good stuff underneath that never changes. This is why i’ve always wondered about the religious/conservative backlash — other than the short sex scenes, this movie is all about commitment and deep friendship.

A final note about time. A part of me felt that, as a comedy, it was a bit too long– i first thought they could have cut out the New Year/Winter sequence. But whats interesting about the Northern hemisphere is that one can SEE time pass through the seasons. That was important as time is a necessary ingredient in forgiveness. So, in a sense the move had to show time pass, that Carrie and Miranda’s could go endure their deepest melancholy in the winter (as this season usually depicts in movies), so they can live again for Fashion week, the movies’ version of new life in the spring.

No i don’t mean the TV show “Heroes”, i mean there are no characters in Philippine TV that succeed because of wit, daring, intelligence, or grace. Why is that? Is there no demand for these kinds of heroes? all we’ve got are super heroes. The problem w superheroes is that they never make mistakes, or aren’t really affected by them.

Are Financial Crises getting more severe? Bordo et al. investigate. They define two kinds of crises: bank,  currrency, or twin (both)

A Bank crisis is when there is insolvency and illiquidity among financial market participants, or if the government steps. A currency crisis happens when there is forced change in parity, or an international rescue., or when an index of exchange market pressure exceeds a threshold. A twin crisis is a bank and a currency crisis that happens simulaneously.

They measure the severity of each crisis as the output loss from crisis, defined as the sum of the difference between pre-crisis trend growth and actual growth from its onset to its end. The duration of the crisis is the time needed to get back to pre-crisis growth rate trend.

Some facts (excluding the inter-war period):

• Not alot of changes in banking crises over the 110 years they look at. Banking crises are virutally nill during the Bretton Woods period, but more prevalent post bretton woods than at any early period. The killer stat is for postbretton woods, there is a 12% chance of having a crisis of some kind.
• Currency crises last as long post-bretton woods as pre-20th century, but shorter than Bretton woods. Banking crises are longer now, than at any period in the past. This goes against the prediction that currency crises should be shorter under the gold standard.
• Currency crises depth is larger in the past than it is now. Same for currency crises. The interesting part is that twin crises’ depth is larger now than ever.
• Not all crises produce output losses. Only twin crises produce output loss for sure.
• when a recession occurs, the depth and the duration of crises are longer for all periods. This is robust to controlling other potential reasons for the severity of a recession, and reverse causality (i.e. from recessions to crises).
• Currency crises are more frequent in the presence of capital controls, banking crises less frequent, post 1973.
• countries with a CA deficit experience larger output losses from crises, post 1973. They theorize that the sudden stop problem of debt becomes an issue post 1973. They think its because CA deficits were more linked to foreign exchange generating activities in the past, like trade, so creditors were more forgiving of large CA deficits.
• For banking crises, liquidity support (a subsidy from the government)  is linked with higher  losses. , and so are currency pegs

For the last two bullets, they dont  control for the possibility of reverse causation, endogeneity.