It's not making software that can solve our problems: it's figuring out how to pose those problems so that the software doesn't bite us in the ass.

Tim Harford writes, "Simon Johnson is a fascinating character, former chief economist of the IMF and now scourge of bankers and lobbyists everywhere."

"The Deadweight Loss of Christmas," published in American Economic Review (Joel Waldfogel, UMN) estimates that "on average, the waste attributable to poorly chosen seasonal gifts was between 15 and 20 per cent of the purchase price of the gift" ($10B/year in the US alone!).

Dispassionately, we know that cheating on our diets or procrastinating on our stupid deadlines isn't worth it, but our stupid brains treat most future consequences as if they're worth nothing, while treating any present-moment benefits as though they were precious beyond riches — so how do you get the "hyperbolic discounting" part of your brain to shut up and listen to reason?

In a fascinating long, thinky piece, economist Tim Harford looks at the history of business and political forecasting, trying to understand why both Keynes and his rival Irving Fisher both failed to forecast the Great Depression and were wiped out (and why Keynes managed to bounce back and die a millionaire, while Fisher died in poverty).

It's really easy to understand the perspective of the companies that own the giant buildings down the street, especially when the other side is a bunch of weird new businesses that want to do stuff no one has done before.

A paper in Industrial Relations A Journal of Economy and Society performs a meta-analysis of a wide range of studies the impact of trade unions on productivity and finds a complex puzzle.

Financial Times economist Tim Harford writes about how "three sensible propositions from economics have somehow been crumpled into a mess of public relations and politics" — how the misleading precision of economic forecasts can be used to paper over purely political decisions, making them seem to be objectively true:

Tim Harford investigates the field of "happynomics" through which economists attempt to devise policies that make people happier, and does an excellent job of sorting the evidence-based approaches from the trendy rubbish that's part ideology and part wishful thinking. Bottom line: beware the "focusing illusion"; count your blessings to reverse your habituation to the good things in life; set things up so that doing the things you want is easier than doing the things that make you unhappy, and, finally, understand that you probably can't be happy all the time. — Read the rest

Tim Harford, my favourite skeptical and eminently readable economist, asks the question: Is London experiencing a housing bubble? He is hesitant to be definitive on this, but makes a very good case for the idea that London housing prices are inflated and heading for a crash.

Writing in the Financial Times, Tim Harford (The Undercover Economist Strikes Back, Adapt, etc) offers a nuanced, but ultimately damning critique of Big Data and its promises. Harford's point is that Big Data's premise is that sampling bias can be overcome by simply sampling everything, but the actual data-sets that make up Big Data are anything but comprehensive, and are even more prone to the statistical errors that haunt regular analytic science. — Read the rest

Back in September, I reviewed Tim Harford's new book The Undercover Economist Strikes Back, a great popular economics book on the perils and promise of the modern world. The book's just been published in a US edition, so I thought I'd revisit that review:

The Undercover Economist Strikes Back is a great macroeconomic companion to his 2005 debut, The Undercover Economist, an excellent and accessible book on microeconomics.

In the end of year episode (MP3) of the BBC's More or Less stats podcast, Tim Harford talks to a variety of interesting people about their "number of the year," with fascinating results.

But the crowning glory of the episode is Helen Arney's magnificent musical tribute to Mersenne 48, the largest Mersenne Prime ever calculated, which came to light in 2013. — Read the rest

Economist Tim Harford answers my question: How would you short the London property bubble? in a column that also asks the important question: should you?

Tim Harford's latest book, The Undercover Economist Strikes Back, is a great macroeconomic companion to his 2005 debut, The Undercover Economist (UK edition), an excellent and accessible book on microeconomics. Structured as a dialog between an economist (Harford) and a notional punter who has been put in charge of getting an imaginary economy going after a deep, long recession (ahem), Strikes Back is full of Harford's witty, clear and memorable explanations of complex and vital subjects. — Read the rest

OpenCorporates has a data-visualization tool for peering into the corporate tax-evasion structures of big corporations — subsidiaries nested like Russian dolls made from Klein bottles:

In Hong Kong, there's a company called Goldman Sachs Structured Products (Asia) Limited. It's controlled by another company called Goldman Sachs (Asia) Finance, registered in Mauritius.

The Financial Times has regular feature called Lunch with the FT in which a columnist takes someone out for lunch and a long chat, and then reports on both the lunch and the talk. I sat down recently with Tim Harford for very nice steaks and cheap wine, and Tim's just written it up:

Doctorow is clearly fascinated by economic issues, and points out that most science fiction and fantasy economies make no logical sense.

Yesterday, I wrote about some Johns Hopkins students who overcame a game theory problem and got an A for the whole class. I called it a non-iterated Prisoner's Dilemma, but as Tim Harford points out, it's more of a Stag Hunt, a game theory category that I hadn't been aware of, and which has fascinating implications for lots of domains, including Internet peering:

In the stag hunt, two hunters must each decide whether to hunt the stag together or hunt rabbits alone.

Tim Harford (Undercover Economist, guest blogger, statistical superhero) has a new show on BBC Radio 4, called Pop Up Economics: well-told tales about the dismal science. The inaugural episode (MP3) is a beautiful parable about innovation and invention.

The latest installment of Tim Harford's BBC/Open University podcast (RSS) More of Less has a fantastic and chilling look at the world of high-frequency automated stock trading, where warring algorithms execute millions of trades in an eyeblink. The story's jumping-off point is Knight Capital, whose faulty algorithm hemorrhaged $10,000,000 per minute, ultimately costing the company nearly half a billion dollars. — Read the rest