2026-04-06 01:57:45
If you have no particular intellectual interests or ambitions and are content with the company of your family and friends, then life on Iceland must be very pleasant, because the inhabitants are friendly, tolerant, and sane. They are genuinely proud of their country and its history, but without the least trace of hysterical nationalism. I always found that they welcome criticism. But I had the feeling, also, that for myself it was already too late. We are all too deeply involved Europe to be able, or even to wish to escape. Though I am sure you would enjoy a visit as much as I did, I think that, in the long run, the Scandinavian sanity would be too much for you, as it is for me. The truth is, we are both only really happy living among lunatics.
That is from W.H. Auden and Louis MacNeice, Letters from Iceland, from 1937, which is one of the better travel books, if indeed that is what it is.
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2026-04-05 23:46:48
This leads us to the next of Freud’s major contributions to neuroscience: his realization that cognition is, at bottom, wishful.
That is from the new and notable Mark Solms, The Only Cure: Freud and the Neuroscience of Mental Healing. This is a good book for people who underrated Freud, or think he is a mere charlatan.
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2026-04-05 19:21:43
Two recent joint-papers Did California’s Fast Food Minimum Wage Reduce Employment? by Clemens, Edwards and Meer and The Effects of California’s $20 Fast Food Minimum Wage on Prices by Clemens, Edwards, Meer and Nguyen give what I think is a plausible and consistent account of California’s $20 fast food minimum wage.
California’s $20 fast food minimum wage raised wages in the sector by roughly 8 percent relative to the rest of the country but employment fell by 2.3 to 3.9 percent (depending on specification, median ~3.2%), translating to about 18,000 lost jobs. Food away from home (FAFH) prices in California’s four CPI-reporting MSAs rose 3.3–3.6 percent relative to 17 control MSAs. Falsification tests on Food at Home and All Items Less Food and Energy show zero differential movement—this is specific to restaurant prices.
What’s interesting is that the papers are independently estimated but the fit is consistent. The price paper uses Andreyeva et al.’s demand elasticity of -0.8 to convert the estimated price increases into an implied quantity declines: about 3.9–4.1 percent in limited-service and 1.7–1.8 percent in full-service. These align well with the employment declines of 3.2 and 2.1 percent estimated in the first paper.
The consistency tells us something about the mechanism. One thing we have learned about the minimum wage in recent years is that the pass-through effect is large and more of the employment decline is driven by pass through than by labor-capital substitution. In other words, prices rose, quantity demanded fell, and that’s what killed the jobs—not robots replacing workers. Not today, anyway.
In terms of welfare, the bulk of employed workers get an 8% wage increase, a small minority get disemployed. The big transfer was from consumers to workers. California has roughly 39 million residents, all of whom face 3.3–3.6% higher FAFH prices. The transfer is likely regressive — lower-income households spend a larger budget share on fast food specifically. So the policy effectively taxes low-income consumers generally to raise wages for a subset of low-income workers, while eliminating jobs for another subset. Your mileage may vary but I don’t see this as a big win for workers. We thought small increases in the minimum wage were absorbed–maybe some were or maybe they were just hard to estimate–but you can’t extrapolate the small increases to big ones–the effect is non-linear. Big increases in the minimum wage start to bite.
As usual, when it comes to fast food there is no such thing as a free lunch.
Addendum: Clemens’s JEP paper continues to be the masterclass in how to think through minimum wage issues.
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2026-04-05 14:33:18
1. Josefina Aguilar Alcantara, RIP (NYT).
2. Move abroad so you can default on your student debt (NYT).
3. History of golf course bunkers (WSJ).
4. Four reasons why possible aliens might make you more ambitious.
5. New learnings on octopuses and sex.
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2026-04-05 12:52:14
Elif Ozdemir, Ankara, align satellites.
Lily Zuckerman, University of Austin (and NYC), painting and general career support.
Benjamin Unger, NYC, AI to measure the performance of New York governments.
Maarten Boudry, Brussels, to write a book on who is really for progress, or not.
Allan Wandia, San Francisco, foundation models that learn directly from raw experimental data.
Richard Ng, London, AI agents.
Jordan Unokesan, London, trust scoring for government contractors.
Alexander Griffiths, London, infrastructure policy and decisions.
Pio Borgelt, 17, Osnabruck, AI.
Vedant Agarwal, 18, Cambridge UK, biosciences.
Chris Lee, Murietta, 18, CA, police recruitment.
Broderick Cotter, Austin, 17, finding the best materials for 3-D printing.
Jehan Azad, San Francisco, radar and UAPs.
Marius Drozdzewski, with collaborators, Berlin, German liberal periodical Aevum.
Ethan Galloway, London, 16, AI algorithms.
Keelan O’Carroll, Florida, happiness podcast.
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2026-04-05 02:18:49
Rich and poor countries differ in the size distribution of business firms. This paper shows that the right tail of the firm size distribution systematically grows thicker with economic development, both within countries over time and across countries. The author develops a simple idea search model with both endogenous growth and an endogenous firm size distribution. The economy features an asymptotic balanced growth path. Along the transition, Gibrat’s law holds at each date, and the right tail of the firm size distribution becomes monotonically thicker. The firm size distribution converges to Zipf’s distribution. The model also implies that policies favouring large firms can improve welfare due to the externality associated with idea search. Finally, the author extends the results obtained in the simple model to a general class of idea search models. Under common functional form assumptions, this model stands out as the only model within that class that is consistent with both Gibrat’s law and a thickening right tail.
That is by Zhang Chen, and a revised version will be appearing in Econometrica.
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