1. Putting the World Bank's Pandemic bonds in perspective in the context of the coronoavirus outbreak - a "distraction from getting serious"!
2. From MR, nice video of traffic flows in different interchange designs
3. Simon Jager, Benjamin Schoefer, and Jorg Heining have a new paper which seeks to capture the effects of a German mandate allocating a third of corporate board seats to workers or shared governance. They write,
We study a reform in Germany that abruptly abolished this mandate for certain firms incorporated after August 1994 but locked it in for the older cohorts. In sharp contrast to the canonical hold-up hypothesis – that increasing labor's power reduces owners' capital investment – we find that granting formal control rights to workers raises capital formation. The capital stock, the capital-labor ratio, and the capital share all increase. Shared governance does not raise wage premia or rent sharing. It lowers outsourcing, while moderately shifting employment to skilled labor. Shared governance has no clear effect on profitability, leverage, or costs of debt. Overall, the evidence is consistent with richer models of industrial relations whereby shared governance raises capital by permitting workers to bargain over investment or by institutionalizing communication and repeated interactions between labor and capital.
The NBER has this summary,
Firms with shared governance actually had capital stocks that were between 40 and 50 percent larger than firms without workers on their supervisory boards. The greater capital stock was not associated with reduced employment; rather, there was an average 12 percent increase in the share of sales produced in-house. Even with slightly more workers, the increase in fixed capital meant a higher capital to labor ratio for companies with shared board representation. The capital share rose by a large 8 percentage points.
4. India's start-up universe with over 50,000 registered firms raised $14.5 bn in 2019 spread over 887 startups, a 25X increase from $550 m in 2010. But an examination of the start-up sectors that raised most capital in 2019 does not inspire great confidence,
5. The Belgian artist Jan Van Eyck represented photography before the camera. Jason Farrago in the NYT has a brilliant tribute on his "ultra-meticulous art",
God is in the details, they assure you; but some art is so jam-packed with details, each hair so fine, each fold so painstaking, that it surpasses even the divine. Nearly six centuries ago, here in the northwest corner of Europe, the painter Jan van Eyck used a brand-new technology — oil paint — to pioneer an art of such precision that it almost negated its religious function, and went past inspiring prayer to become something eternal itself. Still today, for secular audiences, his diamond-hard paintings can appear to come from another world... Van Eyck developed an unprecedented new painting style, which saw the flat signs of Gothic painting give way to exquisite illusions of bodies in real spaces. He discovered that, by varying how crisply or hazily he painted a tree or building, he could reproduce on a flush plank of poplar the depths of a Flemish countryside or a palace interior... He used light effects to simulate buttery flesh that, even at small scale, made saints appear like real human beings...What empowered Van Eyck’s out-of-nowhere naturalism — the incredible sense, as the art historian Ernst Gombrich would write, that he was holding “the mirror to reality in all its details”? New scientific insights, for a start, into optics, reflections and focal points. Hand-eye coordination that would make an Olympic archer jealous. Above all, it was the innovation of oil paint, which dries more slowly than tempera, and which can be blended wet-on-wet to produce contours, shadows and highlights... Oil paint did to 15th-century Flanders what camera phones did to our time: It set off an image explosion. Portraiture became more robust and vivid.
6. Paris Mayor Anne Hidalgo's re-election campaign manifesto speaks about making Paris a "15-minute city".
Paris needs to go one step further and remodel itself so that residents can have all their needs met—be they for work, shopping, health, or culture—within 15 minutes of their own doorstep.
This turns the conventional wisdom on urban planning on its head,
This focus on mixing as many uses as possible within the same space challenges much of the planning orthodoxy of the past century or so, which has studiously attempted to separate residential areas from retail, entertainment, manufacturing, and office districts. This geographical division of uses made sense at the dawn of the industrial era, when polluting urban factories posed health risks for those living in their shadows. Car-centric suburban-style zoning further intensified this separation, leading to an era of giant consolidated schools, big-box retail strips, and massive industrial and office parks, all isolated from each other and serviced by networks of roads and parking infrastructure. But the concept of “hyper proximity,” as the French call it, seeks to stitch some the these uses back together, and it’s driving many of the world’s most ambitious community planning projects.
Paris is following in the footsteps of others like Portland, Oregon which aims to convert 90% of the city into 20-minute neighbourhoods for everything except work, and Barcelona's Superblocks of car-free 40-acre multi-block pedestrian-first zones.
7. The tiny South American country of Guyana, the poorest in the continent, with a population of 780,000 and annual budget of $1.4 bn, has had the world's biggest oil discovery in years.
But the hurriedly signed renegotiated production sharing contract with Exxon Mobil Corp, which is estimated to give the country nearly $170 bn in revenue over the coming decades, has re-ignited the debate about the exploitative relationship between small resource rich countries and multinational companies. The WSJ reports,
It’s kicked off a fuss over fairness and secrecy over the price of the contract and how it was handled. At the heart of the debate is a renegotiated production-sharing agreement signed in 2016 by Guyana’s natural resources minister—just days before Exxon disclosed an increased estimate for the size of its find. Amid mounting criticism of the terms, Guyana’s resources ministry recently hired U.K. law firm Clyde & Co. to examine the circumstances leading to the 2016 deal. It found that Exxon pressured Guyanese officials into signing the deal in a short time frame, “presumably because knowledge of a ‘world class’ discovery could have altered the government’s negotiating position,” according to a copy of the Jan. 30 investigative report reviewed by the Journal...
The deal comes at a good time for Exxon, which has been struggling to maintain its leading status among global oil companies in recent years. Exxon expects a return of at least 30% in Guyana, more than double the 15% return the industry regards as the lowest necessary to justify investment. Since first striking oil there in 2015, the Exxon-led consortium, which also includes HessCorp. and China National Offshore Oil Corp., has repeatedly raised estimates for how much it can recover, and recently upped it to more than 8 billion barrels. The first vessel carrying Guyanese oil, which is extracted 120 miles offshore and sold directly to market, set sail last month... Global Witness, a London-based watchdog group that seeks to expose what it sees as resource exploitation in poor countries, estimated in a report this month that the deal pays Guyana some $55 billion below market value for its resources over three decades. The group also provided documents to the Journal about the process that led to the renegotiation.
8. A new AER paper finds that Facebook reduces subjective well-being and increases political polarisation,
In a randomized experiment, we find that deactivating Facebook for the four weeks before the 2018 US midterm election (i) reduced online activity, while increasing offline activities such as watching TV alone and socializing with family and friends; (ii) reduced both factual news knowledge and political polarization; (iii) increased subjective well-being; and (iv) caused a large persistent reduction in post-experiment Facebook use. Deactivation reduced post-experiment valuations of Facebook, suggesting that traditional metrics may overstate consumer surplus.