Evidence of Intent

Article with the surprising claim that the median income in Germany is lower than that in most US states, when PPP adjusted – https://mises.org/blog/if-sweden-and-germany-became-us-states-they-would-be-among-poorest-states

Conclusion: I would say the weak points that bear more looking at are whether the household adjustment (the square root mentioned above) is significant, and also whether if there are net transfer payments that it’s really not an expense, but rather a form of savings, in which case it would be inaccurate to subtract net savings from the disposable income.

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The original data linked to is http://stats.oecd.org/Index.aspx?DataSetCode=IDD where the income number that was used was the “median disposable income”, which was in 2012,

1. 20857 EUR for Germany
2. 30355 USD for the USA

The “Purchasing Power Parities for GDP and related indicators table” has National currency per US dollar as

1. 0.786 EUR for Germany
2. 1.000 USD for USA (by definition)

The exchange rate for the EUR, as obtained from (http://www.x-rates.com/average/?from=USD&to=EUR&amount=1&year=2012) was between 0.755436 and 0.813635, so not significantly different.

Dividing by PPP, then, we get

1. 26536 for Germany
2. 30355 for the USA

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The definitions are in http://www.oecd.org/els/soc/IDD-ToR.pdf

The income unit is an individual, and there is this adjustment they make for household size which divides the income by the square root of the household size, instead of just dividing by household size. This has the effect of adjusting incomes up when households are larger. This is for the purposes of accounting for economies of scale.

The components of disposable income are

E: employee income, including wages and salaries, cash bonuses and gratuities, commissions and tips, directors’ fees, profit sharing bonuses and other forms of profit-related pay, shares offered as part of employee remuneration, free and subsidised goods and services from an employer, severance and termination pay.1 Sick pay paid by social security should also be included.

KI: capital and property income, including income from financial assets (net of expenses), income from non-financial assets (net of expenses) and royalties. Regular receipts from voluntary individual private pension plans and life insurance schemes should also be included in this income component.

SEI: income from self-employment, including profits and losses from unincorporated enterprises, as well as goods produced for own consumption (net of the costs of inputs). [The inclusion of this latter variable aims to adjust the OECD income concept to the realities of middle-income countries (such as Brazil, South Africa and others), where subsistence agriculture represents a significant income source for people at the bottom of the distribution. Countries that do not collect information on this income item should indicate so in the metadata sheet of the OECD questionnaire].

TRR: current transfers received, including transfers from social security (including accident and disability benefits, old-age cash benefits, unemployment benefits, maternity allowances, child and/or family allowances, all income-tested and means-tested benefits that are part of social assistance), transfers from employment related social insurance, as well as cash transfers from both non-profit institutions and other households

TRP: current transfers paid, including direct taxes on income and wealth, social security contributions paid by households, contributions to employment-related social insurance, current transfers paid to both other households and non-profit institutions. [Values for transfers paid should be reported in the OECD questionnaire with a negative sign].

which certainly looks like social welfare has been accounted for.

Conclusion: I would say the weak points that bear more looking at are whether the household adjustment (the square root mentioned above) is significant, and also whether if there are net transfer payments that it’s really not an expense, but rather a form of savings, in which case it would be inaccurate to subtract net savings from the disposable income.

http://www.cdc.gov/flu/about/season/flu-season-2015-2016.htm

The 2015-2016 trivalent flu vaccine protected against:

• an A/California/7/2009 (H1N1)pdm09-like virus
• an A/Switzerland/9715293/2013 (H3N2)-like virus
• a B/Phuket/3073/2013-like virus. (This is a B/Yamagata lineage virus)

According to the latest Flu Express publication from the Taiwan CDC, the prevalent flus so far this season are:

• A H1N1 (36.8%)
• A H3N2 (63.2%)
• B (25.2%)

Does this mean they got it completely right this year (for Taiwan at least)?

I am currently reading Approximate Dynamic Programming by Warren Powell. The book comes out of work that Powell did with Schneider National, a company that operates a large fleet of trucks in the US.

I haven’t gone very far in the book, but it definitely seems very promising. The central premise that I can grasp is that it is fruitful to consider the quality of a model strictly in light of the decisions that the model is being used to make. This can be contrasted with typical surrogates like the root mean squared error or mutual information – those measures for model quality are largely derived using definitions of convergence towards total knowledge, and attempting to reach the state of total knowledge is often futile in reality.

In building practical models with practical approximations, choices in the early steps of an analysis often contain implicit knowledge about what the output from those steps is to be used for. To carry this process to its logical conclusion would be what I imagine approximate dynamic programming accomplishes – this way of dealing with ignorance trades off uncertainties in such way as to minimize the impact they have on decision quality, as measured by what you actually care about for the specific problem.

I need help understanding this paragraph from The Economist:

His grim prediction is based on the “impossible trinity”: an economy cannot control domestic liquidity and manage its exchange rate if its capital account is open. If it holds down its currency, foreign-exchange inflows will boost money growth. The central bank can try to “sterilise” the impact of bigger reserves by selling securities to mop up the excess liquidity. The snag is that bond sales will tend to push up interest rates and so attract yet more capital inflows. Mr Roubini believes that the room for sterilisation by Asian central banks is severely limited and so rising reserves mean even greater excess liquidity.

article

The NYT published an editorial today on how information available to hedge funds by virtue of their being involved with trading loan derivatives may effectively mean some kind of insider trading.

Insider trading is interesting because the definition of who is an insider has everything to do with game theory. On one hand, you want people to capitalize on information so that there is incentive to spread the information faster, resulting in higher efficiency. On the other hand, if few enough people know something to begin with, it becomes profitable to withhold that information and release it in a disruptive manner such as to reap maximum profit.