Mad about Dogs

More American households have pets than ever — 68.7 million of them in 2006, according to a new survey by the American Veterinary Medical Association, up 12.4 percent from 2001.

Among dog owners, 53.5 percent considered their pets to be members of the family, the survey found. For cats, the number was 49.2 percent.

And the term “family member” should not be used lightly. Ari Henry Barnes, who works in a New York law firm, is so devoted to his cat, Romeo, that he wipes the animal’s behind every time he does “a stinky boom boom.”

-Who Invited the Dog?

Related;
Putin to Bush: My dog is bigger than your dog

National Bingo Callers of the Year 2007 competition

A bit of British Bingo Culture (via Vice Squad)

Podcasts

The Sassanian Empire

Gregory Clark Calls Technology Key to Modern Economy

Allan Meltzer, Says U.S. Fed Is `Giving In' to Pressure

Ha-Joon Chang Says Poor Countries Hurt by Free Trade

Angus Maddison Sees Asia Producing Half of World's GDP by 2030

Yes! The surprising and often costless science of persuasion
Robert Cialdini, Professor of Psychology at Arizona State University

IMF to be rescued by World Bank!

Thought about it after seeing the following news item- may be it should lease out its buildings to World Bank;

New IMF chief plans job cuts of up to 15 pct

New IMF Managing Director Dominique Strauss-Kahn said in an interview with the Journal that he planned to cut 300 to 400 jobs out of the IMF's total staff of more than 2,600. Layoffs would likely be necessary, he told the paper.

Strauss-Kahn said the fund was facing a deficit of $400 million a year by 2010 if loan demand failed to pick up, but estimated the job cuts could reduce that deficit by about a quarter.

The report said the cuts were part of an effort by Strauss-Kahn to win U.S. and European backing for the Washington-based institution to sell its gold and invest the proceeds.

Related;
IMF Managing Director Names Diana Serrano as Human Resources Director

Is CAPM Dead?

From interview with Eugene Fama;

Region: With Kenneth French, you’ve said that the capital asset pricing model (CAPM) developed by John Lintner and William Sharpe has “fatal problems” in explaining stock market returns because of its reliance on beta [the volatility of an individual stock relative to overall market volatility]. And you’ve found that two other factors are crucial for determining prices. Can you tell us about these factors? Are they inefficiencies, or do they represent hidden risk? And is the CAPM truly dead?

Fama: Let me first tell you what the returns evidence says, and then we can talk about how to interpret it. The returns evidence basically says that if you look at the CAPM market beta, it’s not enough to describe the cross section of average returns.

The CAPM says that all you need to know are these market betas, market sensitivities, in order to fully describe the cross section of average returns. What you find is that other variables contribute to the explanation of average returns above and beyond what you get from beta. Indeed, over the last 50 years, you get very little at all from beta.

The two variables that we’ve focused on are market capitalization (the financial profession calls it size, a misnomer because it’s really market capitalization) and the book-to-market ratio, the ratio of the book value of a common equity to its market value. Now, there’s no magic in that ratio. The ratio of almost anything to price will work as well. These are the two variables.

So, small-cap stocks have higher average returns than large-cap stocks, and stocks with higher ratios of book value to market value have higher returns than low book-to-market stocks. Low book-to-market stocks tend to be growth stocks. High book-to-market stocks tend to be relatively more distressed; they’re what people call value stocks. That’s given rise to what the finance profession—academic as well as applied—calls the size premium and the value premium. The value premium tends to be bigger.

So the issue then is, Are these risk factors or market inefficiencies? One group of people says they’re market inefficiencies—particularly the value premium. The behaviorists tend to say the value premium is a market inefficiency. Their story is: The market overreacts to good and bad past times. It doesn’t understand that things tend to mean revert. So growth companies that have done very well tend to be overpriced, and value companies that have done poorly tend to be underpriced, and then the market realizes this and corrects it. And this story says, basically, that people are dumb; they never learn. So every generation of growth stocks and value stocks goes through the same sort of cycle.

That’s not too appealing to an economist—the idea that people never learn about these things—but that is the behavioral story. And initially they said these are arbitrage opportunities because if you go long value stocks and short growth stocks, you get something with a variance close to zero.

But French and I pointed out that if you do that, you get something with a variance very close to the market variance, not zero. It’s quite a risky strategy. And the premium is about the size of the market premium. So it looks and smells like a risk premium. And we developed a three-factor model with a size premium in addition, basically the difference between the returns on small stocks and big stocks.

So, our model has three factors. Every asset pricing model says you need the market in there. Then they differ on how many other things you need. The CAPM says you only need the market. We basically say a minimum of two other factors seem to be necessary. And these two do a pretty good job.

There’s still a third explanation, which is not based on overreaction. It says that people just don’t like small stocks and value stocks. There’s some amount of utility that people get from the nature of the stocks that they hold. So they like big stocks and they like growth stocks, and they’re willing to hold them even though they have lower average returns.

Now you can’t have an arbitrage opportunity there because then there’d be a sure profit. But the fact that they look like risk factors can sustain that story. You can’t tell the difference between that story and a risk story.

Related;
New book: Sharpe's 'Investors and Markets'
The Asset Pricing and Portfolio Choice Simulator

Perry Mehrling, Fischer Black, and Finance
Asset Prices and Portfolio Choice


Books:
Draft chapters of William Sharpe's Investors and Markets: Portfolio Choices, Asset Prices and Invetment Advice

Fama's two books are online; Foundations of Finance, 1976; The Theory of Finance, with Merton Miller, 1972

Assorted

Is the Fed the new FEMA?

Readings on Pakistan

Why Pregnant Women Don’t Tip Over

Steroids, Gains and Costs

Brainman, at Rest in His Oasis

Who Homeschools?

Honduras: Hosed by Sock Tariffs

Masters of Illusion

Keeping track of Subprime

Boobs Fitness

Why the climate change wolf is so hard to kill off

Do we know enough about terrorism?

Is trade war with China credible?

Introducing a Global Database on Migrant Stocks

Simple Giving

A Carbon Cap That Starts in Washington

It ain't half cold mum! Global warming in a long-run perspective

Kenneth Arrow: The Case for Cutting Emissions

From World Bank Research

World Bank Research E-Newsletter

-World Development Report 2009

Economic activity becomes increasingly concentrated with development. As this happens, substantial disparities in welfare can emerge between rural and urban areas, between leading and lagging regions within countries and, perhaps most dramatically, between countries in different parts of the world. The objective of the World Development Report (WDR) 2009 "Seeing Development in 3D" is to identify and understand the interactions between economic geography, growth, and living standards, and to draw the implications of these interactions for policy. WDR 2009 charts the changes in the three spatial dimensions of economic activity and household welfare: rising density, falling distance and persisting division. The WDR will highlight the dimensions and significance of spatial forces that shape economic development; and recommend policies to facilitate the spatial transformations necessary to sustain economic growth, reduce disparities in welfare, and reduce poverty. The report aims to reframe three important policy debates: on urbanization in developing countries; on territorial development policies; and on the pros and cons of regional integration.

Analyzing health equity using household survey data

Equity has long been considered an important goal in the health sector. Yet inequalities persist between poor people and those who are better off, with the poor tending to suffer higher rates of mortality. They also often tend to use health services less, despite having higher levels of need. A new book entitled “Analyzing Health Equity Using Household Survey Data” by O’Donnell, Doorslaer, Wagstaff, and Lindelow provides rigorous analytic techniques for both measurement and analysis of such inequalities, with a view to stimulating health equity research that can support the design and evaluation of health policies and programs. The book offers researchers and analysts a step-by-step practical guide to key analytic techniques in health equity analysis, with examples and computer code, mostly for the Stata program.

Assorted

Transcript of a Book Forum "One Economics, Many Recipes: Globalization, Institutions, and Economy Growth"

How do psychologists think?

How the Millennium Development Goals Are Unfair to Africa- Easterly

Tax Policy: Recent Trends and Coming Challenges

"Justly acquired endowment"??? Taxing as punishment or as a way to raise money

More on research in psychology and economics

Do We Know a Trend is a Trend?

How Much Revenue Could the U.S. Raise by Taxing Negative Externalities?

The height of absurdity

The Best Intro Econ Teacher I Know, Timothy Taylor Writes in...

What would the North Koreans say about the following?

Fists fly in SKorean parliament: television

Watch Dani Rodrik talk about One Economics, Many Recipes

IMF Book Forum on One Economics, Many Recipes: Globalization, Institutions, and Economic Growth

How much praise is enough?

An interesting exchange between Buchanan and Shackle (via The Filter);

Dear Professor Buchanan,

I have just this morning received and read your paper on "The domain of subjective economics." I think it equal in its clarifying power to the greatest insights of theory of the last fifty years. I am thinking of such ideas as ex ante ex post and liquidity preference. Like these, your idea by a brilliant union of subtlety and simplicity strikes fetters from our thought. Your paper will be a classic once-for-all dissolver of confusion. It is a masterly incision of intellectual surgery. You have shown invincibly that the two domains, the subjective and the predictive, are mutually exclusive and must be kept wholly distinct from one another. Your argument proceeds in a manner deserving to be called majestic. Step by step the notions and methods essentially belonging to one domain but found occupying the other are removed to their proper place. What scientific economics, of its essential, inherent nature cannot do and must not attempt is shown inexorably. It cannot and must not be used to predict and therefore cannot be used to advise. I have never volunteered economic advice, but I have not attained or expressed the logic of total distinction and difference of nature of the two domains with any approach to your absolute clarity. I have felt an ever more compelling conviction that the world of thought contains everything that gives significance to choice, value and action. Economic theory has been transformed, or bodily shifted, from being about things to being about thoughts. …

I come to the end of my letter. How can I give you any conception of the feeling wrought in me by the last section of your paper? It is said that we live our span of life for the sake of a few glinting, gleaming golden threads in a homespun fabric, brief glimpses of entire felicity. You have given me one such.

I send you my utmost gratitude, my very best thoughts and wishes,

Yours sincerely,

G.L.S.Shackle

Assorted

A curious market reaction

Tax The Tall

The Roots of the Mortgage Crisis - Greenspan

Stiglitz and Rodrik

The Big Divide in Economics

Should the Democrats move to the left on economic policy?

Franziska Michor Is the Isaac Newton of Biology

Intro to the wonderful world of Austrian economics

I've found a mentor

How to get a PhD *and* save the world

Gaza Economics

Medium-Term Macroeconomic and Fiscal Framework for the West Bank and Gaza

Photo of the Day- Take a Break

United States Army soldiers from Blackfoot Company, Second Battalion, 23rd Infantry Regiment, take a break from searching houses during a mission on the outskirts of Muqdadiya, in the volatile Diyala Province, north of Baghdad.

Scholarships

For Americans;

DHS Scholarships and Fellowshps

International:
Study in Britian: Chevening Scholarship

Lecture of the Day

Vernon Smith talk

Is this good anti-corruption?

Sermons against corruption - from Philippines

Creative and Cool

Freerice

via FP blog

Reading for the Day

Popular Dictators: Who Could Pass the Democratic Test?

Is the Dollar Near the Bottom (II)

Question about principal component analysis

"Productivity vs. Employment Growth: A Zero-Sum Game?"

"Modern" Political Economy, Final Exam

Why Sovereign Funds? Becker

Fiscal Policy Instruments and Climate Change

Micro to macro; why history isn't dead

Would it have helped to give freed slaves land?

War Against Malaria

A very informative documentary updating the global effort against Malaria from AlJazeera;

"Every 30 seconds a child dies from Malaria"

Optimal Taxation of Beards

A little bit of history of beard tax;

In 1535 Henry VIII, famed for his unique sense of justice, decided to levy taxes on beards (even though he continued to wear one with pride). This was repealed in the 1560s, after Henry had succumbed to syphilis, and so the dilemma of choosing to pay the barber or the government was resolved. Later, beard tax was introduced in Russia by Peter the Great after a visiting noblewoman pointed out the snot dangling from his hairy face.

See here for the verification method of payment of the beard tax.

Related;
Soak the Tall: A Lesson in Optimal Taxation

Dubai Dreams and reality

What I have achieved for Dubai is only 10 percent of my vision for it.
— Sheikh Mohammed bin Rashid Al Maktoum

The world’s largest mall. The world’s tallest hotel. The world’s tallest building. The first underwater hotel. The largest waterfront development. The fastest-growing tourist market. The Earth has a new centre and it is a tiny desert kingdom gone mad.

Quote of theDay

“Our country exports wood, but we have no desks,” Mr. Itsouhou said. “Our children are literally learning on their knees. We don’t know where the money goes. We just pray for help.”

-from a school's principal, Martial Itsouhou in Congo

Survey Design and Reframing in Tax Debate

Robert Frank writes about public's attitudes towards taxes;

FORTUNATELY, there is clear evidence that reframing the discussion often has a big impact on the way voters think about tax policy. In the spring of 2005, for example, I asked the Survey Research Institute at Cornell University to conduct two telephone surveys to investigate public attitudes about the Bush administration’s proposal to eliminate the estate tax.

In the first survey, respondents were simply asked whether they favored the proposal. Almost 75 percent said they did. In the second, respondents were first told that lost revenue from eliminating the estate tax would necessitate some combination of raising other taxes, borrowing more money from abroad and further cutbacks in government services. This time, almost 80 percent of respondents favored keeping the estate tax.

Thank God he's almost recovered from a recent heart attack.

What's the litmus test for an economic theory?

Very interesting comment by Mankiw reacting to Peter Diamond's criticism of his paper on 'height tax';

The Times also quotes a critic:

Peter Diamond, an economist at M.I.T., says the paper’s basic mistake is the notion “that if you can draw a silly inference from an approach, then that discredits a model.” He comments: “I think there is probably no model that passes that test."

I wonder what Peter's alternative approach is. If economic theorists are allowed to embrace inferences from a model that they like and cavalierly reject those that they consider "silly," what is the point of theory? That discretion gives the theorist the freedom to always confirm his priors. The economist ends up using theory like a drunk uses a light post--for support rather than illumination.

It seems to me that if you are going to reject a logical inference from a model, you have to explain why. That is not so easy for a height tax, which is precisely the point of the paper.

Debt Unreleif

The main teaching hospital here is in such disrepair that many patients have to pay freelance porters for piggyback rides up and down the stairs to get X-rays. It costs $2 a flight, each way.

But why is the hospital, like so much of the Congo Republic, so tattered when the country sells billions of dollars of oil each year?

The government says it is still recovering from a devastating war and faces a new problem: Western investors, sensing a chance to rake in millions, are suing to recover old debts that they bought for pennies on the dollar.

Such investors, running what critics derisively call vulture funds, have been widely denounced by the World Bank and the International Monetary Fund for forcing poor countries to fend off costly lawsuits rather than build classrooms and clinics.

But in the Congo Republic, where a deep-seated culture of graft has squandered so much of the nation’s wealth, those investors have become unexpected allies of anticorruption campaigners, who say such lawsuits may be the only way of holding the country accountable for how it spends its money.

“We ask ourselves, why is our country like this?” said Dr. Bebene Bondzouzi-Ndamba, a neurologist at the hospital. “Why are we so rich and yet so poor?”

Her questions have come into sharp relief in the fight between the Congo Republic and an affiliate of an American hedge fund, Elliott Associates. For an undisclosed price, the company bought about $31 million in debt that the country took on in the 1980s but later defaulted on. Now it is suing in American, European and Asian courts to collect the principal plus interest and penalties — more than $100 million in all. So far, it has collected $39 million.

-Unlikely Ally Against Congo Republic Graft

Cap-and-trade system- the basics

| View | Upload your own

via debaser (an interesting new economics blog)

From Computer Science to Wall Street to Medical School to Public Health

Via Tyler (Dr. Joel Selanikio also advances economics)

Copied from Chapati Mystery

Chapati Mystery gives us some perspectives;

But if this charge is true, that the girl was not found a virgin, then they shall bring out the girl to the doorway of her father’s house, and the men of her city shall stone her to death because she has committed an act of folly in Israel by playing the harlot in her father’s house; thus you shall purge the evil from among you. Deuteronomy 22:20-21.

Ayaan Hirsi Ali calls 1.6 billion Muslims to task. A simple google search would have shown her the outrages over taslima nasreen, the saudi verdicts and the silly teddy bear. But, I am sure NYT knows better than doing any such fact-checking when screeds are available.

Also, heh.

Dostum: A Story of Afghanistan

An interesting documentary of Abdul Rashid Dostum by Brian Glyn Williams



via Afghanistanica

Related;
The World's Worst Suicide Bombers?

Though attacks are getting more frequent, Williams found that more than four out of every 10 attempted suicide bombings in Afghanistan kills only the attacker. "Such unusual bomber-to-victim death statistics are, of course, heartening both for coalition troops — who have described the Afghan suicide bombers as 'amateurs' — and for the Afghan people, who are usually the victims of the clumsy bombings," writes Williams.

Why the high failure rate? One reason, Williams suggests, is the Pashtun social code of Pashtunwali, which values "acts of martial valor" and revenge. Driven by this code Afghan suicide bombers are more likely to go after hard military targets rather than softer targets such as markets or restaurants as happens in Iraq. The deadliest bombings in Afghanistan over the past two years have been the work of Arabs, not Afghans.

Another review of Farewell to Alms

This time by BENJAMIN M. FRIEDMAN;

In “A Farewell to Alms,” Gregory Clark, an economic historian at the University of California, Davis, suggests an intriguing, even startling answer: natural selection. Focusing on England, where the Industrial Revolution began, Clark argues that persistently different rates of childbearing and survival, across differently situated families, changed human nature in ways that finally allowed human beings to escape from the Malthusian trap in which they had been locked since the dawn of settled agriculture, 10,000 years before. Specifically, the families that propagated themselves were the rich, while those that died out were the poor. Over time, the “survival of the richest” propagated within the population the traits that had allowed these people to be more economically successful in the first place: rational thought, frugality, a capacity for hard work — in short the familiar list of Calvinist, bourgeois virtues. The greater prevalence of those traits in turn made possible the Industrial Revolution and all that it has brought. (A lacuna in the argument is that Clark never says just how prevalent this Darwinian process made the traits he has in mind. Would an increase from, say 0.05 percent of the population to 0.50 percent have mattered much?)

Clark’s book is delightfully written, offering a profusion of detail on such seeming arcana as technology in Polynesia and Tasmania before contact with the West,

Sharia-consistent banking practices in the Ottoman Empire and bathing habits (actually, the lack thereof) in 17th-century England. But Clark’s eye is fixed steadily on the idea he’s pushing; the details are fascinating, but they are there because they help make his central argument. Clark is also marvelously adept at drawing out the relevance of many facets of his historical inquiry for present-day concerns. For example: “We think of the Industrial Revolution as practically synonymous with mechanization, with the replacement of human labor by machine labor. Why in high-income economies is there still a robust demand for unskilled labor? Why do unskilled immigrants with little command of English still walk across the deserts of the U.S. Southwest to get to the major urban labor markets to reap enormous rewards for their labor, even as undocumented workers?”

Brain Boosters

Think Gum

A spray that will improve your memory

Free Chapters on Causal inference and regression

Chapter 9: Causal inference using regression on the treatment variable
Chapter 10: Causal inference using more advanced models
Chapter 23: Causal inference using multilevel models

from author

The link between Corruption and Dating Economics

Are men intimidated by smart women? According to one study in the United States, they are. On Thursday Riz speaks to Dr. Ray Fisman, professor of Economics at Columbia University and expert on gender differences. For two years Dr. Fisman and his team conducted a speed dating experiment looking at the choices men and women make when looking for a partner.

Results showed women put greater weight on the intelligence and race of the partner, while men responded more to physical attractiveness. They also found that men do not value women's intelligence or ambition when it exceeds their own.

Ray Fisman has book (with Ted Miguel), Economic Gangsters, forthcoming next year.

Related;
Dating Data: Economic Theory and the Search for a Mate

Does employment generation really matter for poverty reduction ?

Does employment generation really matter for poverty reduction ?

Summary: This paper analyzes how the employment/productivity profile of growth and its sectoral pattern are correlated with poverty reduction. The authors use a sample of 104 short-run growth spells in developing countries, between 1980 and 2001. They also identify some conditions of the labor market and the economic environment that are associated with employment-intensive growth or specific sectoral growth. The results show that, in the short run, although the aggregate employment-rate intensity of growth does not matter for poverty reduction any more than the aggregate productivity intensity of growth, the sectoral pattern of employment growth and productivity growth is important. Employment-intensive growth in the secondary sector is associated with decreases in poverty, while employment-intensive growth in agriculture is correlated with poverty increases. Similarly, productivity-intensive growth in agriculture is associated with decreases in poverty. Although the study does not address causality, coincidence of these phenomena in this large sample of heterogeneous countries and periods suggests that, in the short run, the sectoral productivity and employment pattern of growth may have important implications for poverty alleviation. Therefore, policies for reducing poverty should not overlook the sectoral productivity and employment implications of different growth policies.

Recently from the Fund and Bank;
Simple Monetary Rules Under Fiscal Dominance
Do Remittances to Latin America Depend on the U.S. Business Cycle?

African Parliamentarians Discuss Ways to Promote Good Governance in the Management of Public Finance
Another Bangladesh Paradox?

Poverty reduction without economic growth ? explaining Brazil's poverty dynamics, 1985-2004
The composition of public expenditure and growth : a small-scale intertemporal model for low-income countries

Russian WTO accession : what has been accomplished, what can be expected
The determinants of HIV infection and related sexual behaviors : evidence from Lesotho
Insurance, credit, and technology adoption : field experimental evidence from Malawi

Statistical analysis of rainfall insurance payouts in southern India
Distributional effects of educational improvements :are we using the wrong model ?
Comparative analysis of labor market dynamics using markov processes : an application to informality

Assorted on VERs

A General Equilibrium Analysis of the Welfare and Employment Effects of US Quotas in Textiles, Autos, and Steel, David G. Tarr,

Using state-of-the-art modeling techniques, this report examines the costs of trade restraints in three industries. Findings indicate that voluntary export restraints in these industries cost the U.S. $21 billion in 1984 while "protecting" 174,000 jobs in the three industries. Thus, the annual cost of each job protected is approximately $120,000.

Welfare Costs of U.S. Quotas in Textiles, Steel and Autos
Jaime de Melo; David Tarr

Welfare costs of U.S. quotas on textiles, steel, and autos

For Background read Krugman and Obstfeld

Today's Explainers

Questions about transformations

What to Do for Colds and Flu
Antibiotics won't work against cold and flu germs.
And, you should take antibiotics only when really needed.

A litmus test on trade policy

Food prices-Cheap no more

More on the new mortgage plan

An Alarming AIDS Prediction

Subprime solutions

Subliminal smells can have powerful effects

Think Before You Ink: Are Tattoos Safe?

A Blog for the day

Deep Thoughts and Silliness

Science Podcast for the Day

GENETIC MUTATION

When lying mortally ill with cancer, the British geneticist J.B.S. Haldane penned the following lines:

Cancer's a Funny Thing:
I wish I had the voice of Homer
To sing of rectal carcinoma,
Which kills a lot more chaps, in fact,
Than were bumped off when Troy was sacked...

Haldane knew better than most that many cancers and many other diseases are caused by genetic mutation. Indeed, to understand mutation fully may explain the ravages of illness and even unlock the secrets of ageing. But mutation, so often a destroyer of life, is also its creator. Without it, the variety of living things on Earth simply wouldn’t exist. It is, in the Darwinian view of life, the raw material of evolution.

Why you should go to Queens

Queens is New York's real United Nations

Interesting Assortment

The Theorist
MIT’s Iván Werning uses theoretical models to find the best economic policies on estate taxes and unemployment insurance

Dynamic Optimization & Economic Applications (Recursive Methods)

Macroeconomic Theory III

Basic Political Economy

Tolstoy on the Economics of Education

Libertarians, Take Your Pick: U.S. or Singapore?

Blog of the Day

CBO Blog

Introduction to Econometrics

Another very good set of notes on Introductory Econometrics

Econometric Analysis of Panel Data

Brain on Violence

Researchers Identify Changes in Brain When Viewing Violent Programs

An impossible task?

How to get 100 million children in India reading in three years

Ebola is getting out of control?

Doctor dies of Ebola in Mulago Hospital, Uganda

The Chinese Way

Crazy English


Chinese practice cheering in front of the world

Fighting fire the Chinese way

Michael Kremer Profile

As Abhijit Banerjee of the Massachusetts Institute of Technology, Kremer's colleague and coauthor, explains: "When most economists come up with an idea that might make the world a better place, they assume that they must have got it wrong, on the grounds that if it were correct it would be in place already, and, reluctantly, decide to forget about it. Michael immediately starts to think of ways to make it happen."

And make it happen, he does. His intellectual work and indefatigable public persuasion recently paved the way for the creation of a new mechanism called advance market commitments (AMCs) to further the development of a vaccine against pneumococcal diseases, which claim the lives of up to a million children in poor countries each year. Robert Barro, one of the gurus of the study of economic growth and Kremer's advisor at Harvard, says that the AMC idea "is likely to make an unprecedented contribution to the improvement of health outcomes in the world's neediest countries."

Kremer has also helped introduce a major methodological innovation in empirical development economics: the randomized evaluation of public policy interventions. This has not only helped rehabilitate the discipline of development economics in academia, it has moved governments and nongovernmental organizations (NGOs) around the world to more rigorously evaluate their activities and their impact. And he has made other important academic contributions, many with the common theme of identifying ways to work collaboratively (typically at the international level) to improve the welfare of poor people. Fellow Harvard professor and Nobel Laureate Amartya Sen stresses that Kremer "has made an outstanding contribution in combining economic theory and sophisticated empirical techniques and applying it to critical policy issues in development economics."

Kremer, now 43, grew up in Kansas and attended Harvard as an undergraduate. Trips to South Asia and Kenya—where he spent a year teaching mathematics and science to students and devoting a lot of time to getting a resource-starved school in remote western Kenya up and running—triggered his interest in development. Kremer followed up on the Kenya experience by starting WorldTeach, a nonprofit organization that now sends 370 teachers annually to schools in the developing world, including such places as the Marshall Islands. He also equipped himself with a graduate degree in economics from Harvard, followed by professorships, first at the Massachusetts Institute of Technology and then at Harvard.

-Harnessing Ideas to Idealism, latest edition of IMF's F&D

Related from the edition;
UAE- Country Focus (especially for FOX's Business reporters)
Changing Aid Landscape
Subprime: Tentacles of a Crisis
Africa's Missing Ingredients

In a randomized trial honey wins over other cough medications

A bit of buckwheat honey before bedtime may be the treatment of choice for a young child with a cough, suggested a randomized trial here.

In a three-way comparison, honey was significantly more effective than no treatment (P<0.001) for relief of symptoms, and dextromethorphan was not, Ian M. Paul, M.D., of Penn State, and colleagues, reported in the December issue of Archives of Pediatrics and Adolescent Medicine.

"Honey may be a preferable treatment for the cough and sleep difficulty associated with childhood upper respiratory tract infection," they concluded.

In the study of 105 children, a half teaspoon to two teaspoons of buckwheat honey led to overall symptom severity scores of about nine on the second night, compared with 11 for honey-flavored dextromethorphan and 13 for no treatment at all, the investigators said.

"All of the outcomes found honey to yield the greatest improvement, followed by dextromethorphan, while no treatment consistently showed the least amount of improvement," the authors wrote. "For cough frequency, those who received honey had a mean 1.89-point improvement as rated by their parents compared with a 1.39-point change for those receiving dextromethorphan and a 0.92-point change for those who had no treatment on the second night (P<0.001).

They found that dextromethorphan was not significantly better than no treatment for any study outcome. "Similarly, pairwise comparison of honey with dextromethorphan revealed no statistically significant differences," the group said.

In an accompanying editorial, a group led by Michael D. Warren, M.D., of Vanderbilt, noted that "honey is generally affordable and often cheaper than OTC antitussives and has a low risk profile when used in patients older than one year. Processed honey is rarely associated with allergic reactions, although such reactions are more likely in persons with pollen allergy."

In the randomized trial, the difference between honey and no treatment was significant (P<0.001). Significant differences between honey and no treatment were also found for every individual symptom: cough frequency, cough severity, annoyance to child, child's sleep, and parents' sleep (P<0.001 for all).

"Dextromethorphan continues to be used very frequently in the United States despite numerous studies, evidence-based reviews, and policy statements describing its lack of efficacy," the group wrote.

"While additional studies to confirm our findings should be encouraged, each clinician should consider the findings for honey, the absence of such published findings for dextromethorphan, and the potential for adverse effects and cumulative costs associated with the use of dextromethorphan when recommending treatments for families," the investigators said.

The new study enrolled children with a mean age of about five years who had coughs lasting a week or less because of upper respiratory infections. Those with possibly more treatable conditions, as well as those with asthma or other chronic lung conditions, were excluded.

Active-treatment doses were scaled according to age. Those ages two to five received half a teaspoon, ages six to 11 received one teaspoon and ages 12 to 18 received two teaspoons. Dextromethorphan was prepared at 17 mg/5 ml. Children and their parents did not know whether they were receiving honey or dextromethorphan, but those assigned to no treatment were aware of it.

Outcomes were assessed by parents. They completed a questionnaire at enrollment on symptoms the previous night, which was repeated the next day after the children had taken a dose of dextromethorphan or honey, or remained untreated.

The study could not determine why honey would be effective, but the authors cited other research finding that honey contains antioxidant and antimicrobial compounds that conceivably could have an effect on cough symptoms. Dark honeys, including the buckwheat honey used in this study, appear to be relatively rich in these compounds.

-Honey Soothes the Coughing Child