Alex Tabarrok, a libetarian economist who writes for Marginal Revolution, has a new paper out: Is regulation to blame for the decline in American entrepreneurship?  No, he finds.  I admire his intellectual honesty, but I question his definition of “economic dynamism.”

There’s a book, by Scott A. Shane, called The Illusions of Entrepreneurship.  Shane explains that there is a huge gap between what we imagine when we think of “entrepreneurship” and the reality of what the go-to statistics describe.  Things like the “rate of new startup formation” are dominated overwhelmingly by the churn of things like laundromats, taco trucks, and lawnmowing services, not by firms driving the adoption of new technology or economic growth.  Think of people you know who own small businesses – would any of them be excited to hear that the rate of entry and exit into their market has gone up?  And would you, as a consumer, be happier if the rate of laundromats in your neighborhood opening up and closing down were high or low?

Countries that do have high rates of entrepreneurship tend to be developing countries where many ambitious people are excluded from the formal job market – and often, small business in developed countries are run by immigrants or others whose access to domestic employment networks is limited.  These are not signs of economic health, so if we want to measure “economic dynamism” in the sense we imagine it – the adoption of new and better technologies and business techniques – we need different metrics.


Research papers from policy school

Today I went digging through my hard drive for a research paper I wrote in policy school that used structural equations modeling to analyze the 2004 United States presidential election.  Sadly, it seems I lost the final version and only have a rough draft.  I did, however, find another research paper on population changes in Wayne and Oakland counties (roughly, Detroit and its wealthier suburbs.)


You might find it interesting if you like Detroit or pretty choropleths:choro

Some mixed, sort-of tooting my own horn: I independently discovered one of the most important urban trends in the United States – the dispersal of poor, urban blacks to inner ring suburbs, which in many ways laid the ground for the recent conflict in Ferguson.  Of course, by that time, the professionals had already discovered it.

I also found, in retrospect, absolutely no evidence for gentrification in Detroit from 1990-2000; at the time I worded my conclusion a bit more weakly, probably because no one I talked to wanted to hear this conclusion.  Fortunately, I’m coming to care less what others think in my old age.  Also in retrospect, the most likely cause of the changes I observed is the Third Great Migration.

I guess I’ll take a stab at explaining the lost structural equations modeling paper as well.

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