Dirk Niepelt

15 years ago, Swissair stopped operating. Many of the fleet’s airplanes were grounded at Zurich airport. Staff and passengers could not understand the world, official Switzerland was in a state of shock, and public perceptions of UBS management which was considered to have acted in treacherous ways, started their long descend. The movie: Grounding. Werner Enz looks back in the NZZ.

On IBM Research Labs’ beautiful campus in Rüschlikon near Zurich, researchers are developing “cognitive computing” tools and applications, among others. An IBM paper written in response to a White House request for information explains: At IBM, we are guided by the term “augmented intelligence” rather than “artificial intelligence.” It is the critical difference between systems that enhance and scale human expertise rather than those that attempt to replicate all of human intelligence. We...

The Economist reports about research by Paul Smaldino and Richard McElreath indicating that studies in psychology, neuroscience and medicine have low statistical power (the probability to correctly reject a null hypothesis). If, nevertheless, almost all published studies contain significant results (i.e., rejections of null hypotheses), then this is suspicious. Furthermore, Smaldino and McElreath’s research suggests that the process of replication, by which published results are tested...

In a remarkable documentary about settlers in the West Bank, Shimon Dotan interviews Israeli settlers, local farmers and Israeli officials. He paints a picture of continuous clashes between fundamentalist convictions on the one hand and the rule of law on the other, with the former gaining the upper hand.

At the recent Karl Brunner Centenary event, Ernst Baltensperger characterized Monetarism as a set of five convictions: Money matters (as accepted in the neoclassical synthesis) Rules are preferred over discretion (in contrast to the views of Modigliani, Samuelson or Klein), but some flexibility is accepted Inflation and inflation expectations are key (in contrast to traditional Keynesian views)—adaptive expectation formation, parallels to Phelps Money growth targeting is useful—Brunner...

In Die Volkswirtschaft, Ernst Baltensperger and Peter Kugler summarize the history of the Swiss Franc since the mid 19th century: After 1973, the Swiss Franc has been strong. Swiss Franc yields have been lower than what uncovered interest parity would suggest. Before 1914, the Swiss Franc was weak in the sense that it enjoyed only limited credibility. In periods with fixed exchange rates, Swiss Franc yields typically exceeded yields in French Franc or Sterling. Throughout the 20th...

In an NBER working paper, Liran Einav, Amy Finkelstein, and Atul Gupta document similarities between healthcare for humans and pets in the US: (i) rapid growth in spending as a share of GDP over the last two decades; (ii) strong income-spending gradient; (iii) rapid growth in the employment of healthcare providers; and (iv) similar propensity for high spending at the end of life.

The “Trouble with Macroeconomics,” according to a working paper by Paul Romer that is posted on his website, relates to dishonest identification assumptions, in particular in DSGE models used for policy analysis. Romer singles out calibration, assumptions about distribution functions and strong priors as culprits. Romer argues that [b]eing a Bayesian means that your software never barfs and I agree with the harsh judgment by Lucas and Sargent (1979) that the large Keynesian macro models...

The SNB commemorated Karl Brunner’s 100th birthday with a Centenary Event and the first of a new lecture series, the Karl Brunner Distinguished Lecture Series. Allan Meltzer, Benjamin Friedman, Charlie Plosser, and Ernst Baltensperger reviewed Karl Brunner’s life and work at the event; Kenneth Rogoff delivered the lecture. In the NZZ, Allan Meltzer writes about Karl Brunner. Ditto Kurt Schilknecht.

In the FAZ, Patrick Bernau und Manfred Schäfers report that the German Federal Ministry for Economic Affairs invited five research institutes to produce economic forecasts although the call for bids had stated that the Ministry would contract with at most four institutions. Legal experts agree that this procedure is illegal. The report suggests that the institution that just made it (DIW) is led by Marcel Fratzscher who is politically close to the Minister.