Dirk Niepelt

In a Hoover Institution Essay, Joshua Rauh describes the extent to which US states and communities under fund public sector pensions. Even under states’ own disclosures and optimistic assumptions about future investment returns, assets in the pension systems will be insufficient to pay for the pensions of current public employees and retirees. Taxpayer resources will eventually have to make up the difference. Despite the implementation of new Governmental Accounting Standards Board (GASB)...

On MIT News, Larry Hardesty offers a brief history of neural networks and “deep learning” (learning by networks with many layers).

The Economist reports about new accounting standards for insurers. IFRS 17, to come into force in 2021 (in most countries but not in the US), requires insurers to use current discount rates to value cash flows. This corresponds with EU practice. America and parts of Asia allow the use of historical discount rates.

On the FT Alphaville blog, Izabella Kaminska reports about delays, fees, and doubts.

… according to PredictWise: Strongly rising, at 25%+. Tyler Cowen: Ditto, 25%.

On Econofact, Daniel Bergstresser provides background information on Puerto Rico’s debt crisis. From his text: Unlike U.S. municipalities, a U.S. territory cannot resort to Chapter 9 of the Bankruptcy act. The island’s economy benefited from corporate tax exemptions (until 2006) and from tax exemptions on interest paid by municipal bonds issued by Puerto Rico and its agencies (“triple tax exemption”). Total bond indebtedness (face value) amounts to over $70 billion, about 70 percent of...

In the NZZ, Jürg Müller reports about the developing regulatory framework for fintechs in Switzerland. A proposal by the federal finance department drew—reasonable—criticism by various lobbies and industry associations, including the CFA Society Switzerland. Die CFA Society Switzerland will das systemrelevante Bankensystem von anderen Finanzdienstleistern trennen. Dafür sei eine präzisere Bankendefinition nötig, als sie heute vorgenommen werde. Nur Banken sollen demnach dem Bankengesetz...

On his blog, JP Koning provides an account of recent monetary policy in Zimbabwe: The country dollarized in 2008. The central bank offered USD deposit accounts for banks, specifically for inter bank payments. But these accounts were not fully backed by USDs, or the central bank rationed access to USDs for other reasons (early 2016). Banks got squeezed, bank customers started a run, and the government imposed withdrawal limits. Retailers started to charge higher prices for “plastic money”...

On Science of Us, Seth Stephens-Davidowitz reports about predictors of loan repayment choices. … language that potential borrowers use is a strong predictor of their probability of paying back. And it is an important indicator even if you control for other relevant information lenders were able to obtain about those potential borrowers, including credit ratings and income. … Here are the phrases used in loan applications by people most likely to pay them back: debt-free, lower interest...

On A Fine Theorem, Kevin Bryan reviews Baumol’s work, including on innovation and the cost disease.