Luis Garicano
@lugaricano.bsky.social
Economist.
Professor @LSE SPP
My webpage:
https://sites.google.com/site/luisgaricano/
Substack (innovation, econ., Europe): SiliconContinent.com
My book on the Euro is out on June 2025.
Professor @LSE SPP
My webpage:
https://sites.google.com/site/luisgaricano/
Substack (innovation, econ., Europe): SiliconContinent.com
My book on the Euro is out on June 2025.
This Draghi piece is a quiet indictment on the
@EUCommission's failure on its core Treaty mandate: "establishing the internal market" & ensuring "free movement of goods, persons, services and capital."
His facts are devastating. A thread summarizing them and drawing some consequences.
1/
@EUCommission's failure on its core Treaty mandate: "establishing the internal market" & ensuring "free movement of goods, persons, services and capital."
His facts are devastating. A thread summarizing them and drawing some consequences.
1/
February 18, 2025 at 4:51 PM
This Draghi piece is a quiet indictment on the
@EUCommission's failure on its core Treaty mandate: "establishing the internal market" & ensuring "free movement of goods, persons, services and capital."
His facts are devastating. A thread summarizing them and drawing some consequences.
1/
@EUCommission's failure on its core Treaty mandate: "establishing the internal market" & ensuring "free movement of goods, persons, services and capital."
His facts are devastating. A thread summarizing them and drawing some consequences.
1/
Not long ago, defending the huge responsibility of Universities to honor the bottom-up process of truth seeking...not shortcircuit debate and declare what is right would have provoked outrage. A beautiful speech by UChicago President Alivisatos. news.uchicago.edu/story/chicag...
February 8, 2025 at 2:07 PM
Not long ago, defending the huge responsibility of Universities to honor the bottom-up process of truth seeking...not shortcircuit debate and declare what is right would have provoked outrage. A beautiful speech by UChicago President Alivisatos. news.uchicago.edu/story/chicag...
Policies that superficially sound "progressive" but damage their stated beneficiaries (like greens sabotage of transmission and nuclear; or Nimbys on housing): eliminating testing reduced the chances of underprivileged students.
January 27, 2025 at 9:18 PM
Policies that superficially sound "progressive" but damage their stated beneficiaries (like greens sabotage of transmission and nuclear; or Nimbys on housing): eliminating testing reduced the chances of underprivileged students.
Non econs will love you for this: "lets get rid of prices! one mechanism design paper shows a rationing mechanism that works (below) !" But we know theoretically (yes, Econ 101!) and empirically that price/rent controls create large inefficiencies, will slow/stop CA reconstruction. Disagree?
January 14, 2025 at 2:49 PM
Non econs will love you for this: "lets get rid of prices! one mechanism design paper shows a rationing mechanism that works (below) !" But we know theoretically (yes, Econ 101!) and empirically that price/rent controls create large inefficiencies, will slow/stop CA reconstruction. Disagree?
A global relationship recession: across the world, the drop in fertility is linked to a significant drop in the number of couples in a stable relationship.
E.g.: South Korea down from 58% 25-34 yo cohabiting to 23%.
Outstanding data story @jburnmurdoch.bsky.social
on.ft.com/4fWosfH
E.g.: South Korea down from 58% 25-34 yo cohabiting to 23%.
Outstanding data story @jburnmurdoch.bsky.social
on.ft.com/4fWosfH
January 11, 2025 at 12:12 PM
A global relationship recession: across the world, the drop in fertility is linked to a significant drop in the number of couples in a stable relationship.
E.g.: South Korea down from 58% 25-34 yo cohabiting to 23%.
Outstanding data story @jburnmurdoch.bsky.social
on.ft.com/4fWosfH
E.g.: South Korea down from 58% 25-34 yo cohabiting to 23%.
Outstanding data story @jburnmurdoch.bsky.social
on.ft.com/4fWosfH
Fields of "inquiry" where asking simple factual, yes/no, questions is considered worth an expulsion from campus.
In case these mobsters care about facts, the factual answer to the question is yes: LLMs are now able to ace the exams in most fields of knowledge. @arpitrage.blusky.social
In case these mobsters care about facts, the factual answer to the question is yes: LLMs are now able to ace the exams in most fields of knowledge. @arpitrage.blusky.social
December 26, 2024 at 10:26 PM
Fields of "inquiry" where asking simple factual, yes/no, questions is considered worth an expulsion from campus.
In case these mobsters care about facts, the factual answer to the question is yes: LLMs are now able to ace the exams in most fields of knowledge. @arpitrage.blusky.social
In case these mobsters care about facts, the factual answer to the question is yes: LLMs are now able to ace the exams in most fields of knowledge. @arpitrage.blusky.social
Yes but not when you are teaching to that test! Is math ability/knowledge measured by a math test? Is it measured by a math test towards which the teachers spend the year optimizing? No! I liked this post by Melanie Mitchell a lot.
aiguide.substack.com/p/did-openai...
aiguide.substack.com/p/did-openai...
December 25, 2024 at 10:43 AM
Yes but not when you are teaching to that test! Is math ability/knowledge measured by a math test? Is it measured by a math test towards which the teachers spend the year optimizing? No! I liked this post by Melanie Mitchell a lot.
aiguide.substack.com/p/did-openai...
aiguide.substack.com/p/did-openai...
Will Bluesky be able to avoid prestige-seeking vigilantes lynching anyone outside (their) orthodoxy? Will we all be willing to take a risk to help the hapless victim of the lynch mob? Let's promise to try, at least.
(Screen shot from 2022 Jonathan Haidt piece
www.theatlantic.com/magazine/arc... )
(Screen shot from 2022 Jonathan Haidt piece
www.theatlantic.com/magazine/arc... )
November 28, 2024 at 11:39 AM
Will Bluesky be able to avoid prestige-seeking vigilantes lynching anyone outside (their) orthodoxy? Will we all be willing to take a risk to help the hapless victim of the lynch mob? Let's promise to try, at least.
(Screen shot from 2022 Jonathan Haidt piece
www.theatlantic.com/magazine/arc... )
(Screen shot from 2022 Jonathan Haidt piece
www.theatlantic.com/magazine/arc... )
Banks' business model:
1. Collect government-guaranteed deposits.
2. Make risky investments
3. Keep profits in good times
4. Get bailouts in bad times
Is this worth protecting?
Private credit funds and fintech companies do most banking functions better.
1. Collect government-guaranteed deposits.
2. Make risky investments
3. Keep profits in good times
4. Get bailouts in bad times
Is this worth protecting?
Private credit funds and fintech companies do most banking functions better.
November 27, 2024 at 9:47 AM
Banks' business model:
1. Collect government-guaranteed deposits.
2. Make risky investments
3. Keep profits in good times
4. Get bailouts in bad times
Is this worth protecting?
Private credit funds and fintech companies do most banking functions better.
1. Collect government-guaranteed deposits.
2. Make risky investments
3. Keep profits in good times
4. Get bailouts in bad times
Is this worth protecting?
Private credit funds and fintech companies do most banking functions better.
This is not improving!
Example: US banks hold $2.7T in commercial real estate loans, many backed by empty office buildings. With just 10% defaults, median US bank hits negative equity. Only deposit insurance prevents a run.
We're subsidizing massive risk-taking.
5/10
Example: US banks hold $2.7T in commercial real estate loans, many backed by empty office buildings. With just 10% defaults, median US bank hits negative equity. Only deposit insurance prevents a run.
We're subsidizing massive risk-taking.
5/10
November 27, 2024 at 9:47 AM
This is not improving!
Example: US banks hold $2.7T in commercial real estate loans, many backed by empty office buildings. With just 10% defaults, median US bank hits negative equity. Only deposit insurance prevents a run.
We're subsidizing massive risk-taking.
5/10
Example: US banks hold $2.7T in commercial real estate loans, many backed by empty office buildings. With just 10% defaults, median US bank hits negative equity. Only deposit insurance prevents a run.
We're subsidizing massive risk-taking.
5/10
Banks' main feature isn't lending anymore - it's their vulnerability to runs. SVB proved modern bank runs happen at WhatsApp speed.
The current solution? Ever-expanding government guarantees. Every crisis brings bigger bailouts.
4/10
The current solution? Ever-expanding government guarantees. Every crisis brings bigger bailouts.
4/10
November 27, 2024 at 9:47 AM
Banks' main feature isn't lending anymore - it's their vulnerability to runs. SVB proved modern bank runs happen at WhatsApp speed.
The current solution? Ever-expanding government guarantees. Every crisis brings bigger bailouts.
4/10
The current solution? Ever-expanding government guarantees. Every crisis brings bigger bailouts.
4/10
They impose these restrictions to avoid financial instability (warning: usually this expression means a banker wants to pick your pocket).
Why protect banks when they're becoming obsolete?
Non-bank players now handle mortgages, payments, corporate credit, etc.
3/10
Why protect banks when they're becoming obsolete?
Non-bank players now handle mortgages, payments, corporate credit, etc.
3/10
November 27, 2024 at 9:47 AM
They impose these restrictions to avoid financial instability (warning: usually this expression means a banker wants to pick your pocket).
Why protect banks when they're becoming obsolete?
Non-bank players now handle mortgages, payments, corporate credit, etc.
3/10
Why protect banks when they're becoming obsolete?
Non-bank players now handle mortgages, payments, corporate credit, etc.
3/10
The ECB wants to give Europeans direct central bank accounts for payments. Their goal? Compete with Bitcoin and lower transaction costs by cutting out Visa/Mastercard fees.
Sounds great... until you see the restrictions.
2/10
Sounds great... until you see the restrictions.
2/10
November 27, 2024 at 9:47 AM
The ECB wants to give Europeans direct central bank accounts for payments. Their goal? Compete with Bitcoin and lower transaction costs by cutting out Visa/Mastercard fees.
Sounds great... until you see the restrictions.
2/10
Sounds great... until you see the restrictions.
2/10
Europe's attempt to create an alternative to Chinese batteries failed today as Northvolt filed for bankruptcy and its CEO resigned (Bloomberg).
A few weeks ago I wrote this substack on why the EU eV industrial policy was likely to fail:
www.siliconcontinent.com/p/these-eu-t...
A few weeks ago I wrote this substack on why the EU eV industrial policy was likely to fail:
www.siliconcontinent.com/p/these-eu-t...
November 22, 2024 at 2:49 PM
Europe's attempt to create an alternative to Chinese batteries failed today as Northvolt filed for bankruptcy and its CEO resigned (Bloomberg).
A few weeks ago I wrote this substack on why the EU eV industrial policy was likely to fail:
www.siliconcontinent.com/p/these-eu-t...
A few weeks ago I wrote this substack on why the EU eV industrial policy was likely to fail:
www.siliconcontinent.com/p/these-eu-t...
But some hard tradeoffs do exist.
EU labor laws kill speed and adaptation:
- US: Meta cut 20k jobs fast, spent $37B on AI
- Nokia: needs 3 years to restructure.
But can't pivot fast = death in tech
EU labor laws kill speed and adaptation:
- US: Meta cut 20k jobs fast, spent $37B on AI
- Nokia: needs 3 years to restructure.
But can't pivot fast = death in tech
November 20, 2024 at 6:13 PM
But some hard tradeoffs do exist.
EU labor laws kill speed and adaptation:
- US: Meta cut 20k jobs fast, spent $37B on AI
- Nokia: needs 3 years to restructure.
But can't pivot fast = death in tech
EU labor laws kill speed and adaptation:
- US: Meta cut 20k jobs fast, spent $37B on AI
- Nokia: needs 3 years to restructure.
But can't pivot fast = death in tech
Want both safety nets AND outliers? Israel may offer a way to combine them:
It has a strong safety net. But:
- Top tech universities, 30% of students in science/engineering
- Tax breaks for foreign investors
- 5.9B in VC (3x more than Italy)
- Market-driven incubators
7/
It has a strong safety net. But:
- Top tech universities, 30% of students in science/engineering
- Tax breaks for foreign investors
- 5.9B in VC (3x more than Italy)
- Market-driven incubators
7/
November 20, 2024 at 6:13 PM
Want both safety nets AND outliers? Israel may offer a way to combine them:
It has a strong safety net. But:
- Top tech universities, 30% of students in science/engineering
- Tax breaks for foreign investors
- 5.9B in VC (3x more than Italy)
- Market-driven incubators
7/
It has a strong safety net. But:
- Top tech universities, 30% of students in science/engineering
- Tax breaks for foreign investors
- 5.9B in VC (3x more than Italy)
- Market-driven incubators
7/
Example: EU just approved Product Liability Directive- which is all about limiting risk- and crushing startups. It affects AI in particular: claimants will likely not even need to establish a causal link between an AI system’s operations and the damage caused.
5/
5/
November 20, 2024 at 6:13 PM
Example: EU just approved Product Liability Directive- which is all about limiting risk- and crushing startups. It affects AI in particular: claimants will likely not even need to establish a causal link between an AI system’s operations and the damage caused.
5/
5/
EU policies crush outliers:
- Policies for average universities, not elite ones.
- Pensions cannot take risk - invest in VC
- Bankruptcy punishes failrue harder than US
- Push broad skills over breakthrough ideas
- Regulate AI to death
4/
- Policies for average universities, not elite ones.
- Pensions cannot take risk - invest in VC
- Bankruptcy punishes failrue harder than US
- Push broad skills over breakthrough ideas
- Regulate AI to death
4/
November 20, 2024 at 6:13 PM
EU policies crush outliers:
- Policies for average universities, not elite ones.
- Pensions cannot take risk - invest in VC
- Bankruptcy punishes failrue harder than US
- Push broad skills over breakthrough ideas
- Regulate AI to death
4/
- Policies for average universities, not elite ones.
- Pensions cannot take risk - invest in VC
- Bankruptcy punishes failrue harder than US
- Push broad skills over breakthrough ideas
- Regulate AI to death
4/
If you look beyond tech giants. US economy isn't that special:
- Banking? Worse than EU
- Insurance? Worse
- Manufacturing? EU growing faster
But superstars change everything. 5 tech firms spend 2x more on R&D than entire EU public sector.
3/10
- Banking? Worse than EU
- Insurance? Worse
- Manufacturing? EU growing faster
But superstars change everything. 5 tech firms spend 2x more on R&D than entire EU public sector.
3/10
November 20, 2024 at 6:13 PM
If you look beyond tech giants. US economy isn't that special:
- Banking? Worse than EU
- Insurance? Worse
- Manufacturing? EU growing faster
But superstars change everything. 5 tech firms spend 2x more on R&D than entire EU public sector.
3/10
- Banking? Worse than EU
- Insurance? Worse
- Manufacturing? EU growing faster
But superstars change everything. 5 tech firms spend 2x more on R&D than entire EU public sector.
3/10
Today in Silicon Continent: why is US tech racing ahead of Europe?
It's all about superstars. A few top firms drive most progress:
- SpaceX = 80% of space cargo.
- 95% of AI chips made by one firm.
- 2 companies made all approved mRNA vaccines.
www.siliconcontinent.com/p/it-is-all-...
THREAD
1/10
It's all about superstars. A few top firms drive most progress:
- SpaceX = 80% of space cargo.
- 95% of AI chips made by one firm.
- 2 companies made all approved mRNA vaccines.
www.siliconcontinent.com/p/it-is-all-...
THREAD
1/10
November 20, 2024 at 6:13 PM
Today in Silicon Continent: why is US tech racing ahead of Europe?
It's all about superstars. A few top firms drive most progress:
- SpaceX = 80% of space cargo.
- 95% of AI chips made by one firm.
- 2 companies made all approved mRNA vaccines.
www.siliconcontinent.com/p/it-is-all-...
THREAD
1/10
It's all about superstars. A few top firms drive most progress:
- SpaceX = 80% of space cargo.
- 95% of AI chips made by one firm.
- 2 companies made all approved mRNA vaccines.
www.siliconcontinent.com/p/it-is-all-...
THREAD
1/10
Fascinating charts.
The American left was sent spinning in 2016, by John Burn-Murdoch on.ft.com/40KKDBt via @FT
The American left was sent spinning in 2016, by John Burn-Murdoch on.ft.com/40KKDBt via @FT
November 15, 2024 at 7:18 AM
Fascinating charts.
The American left was sent spinning in 2016, by John Burn-Murdoch on.ft.com/40KKDBt via @FT
The American left was sent spinning in 2016, by John Burn-Murdoch on.ft.com/40KKDBt via @FT