I'm teaching a new course at Stern on AI in Finance and opening it up! Syllabus/slides on Github: github.com/arpitrage/ai-in-f… Weekly summaries on Substack arpitrage.substack.com/p/1-t… First post is on Amdahl's Law, Jevons' Paradox, and why finance was slow to learn the bitter lesson

Manhattanites united for the Kowloon Cityification of Manhattan

Hard to imagine that DSGE models can survive the Lucas Critique with AI adoption Even if you thought discount rates, etc were invariant among *humans,* AI adoption will so radically change the set of preferences and constraints that existing models will struggle to capture

One way economics is already pre-adapted to AI slop is we use seminar and conference presentations to judge quality, not just the written text People who use AI but don’t understand the output will pay a penalty in talks

Great value capture opportunity for Muse: less time spent working or on chores is more time to spend on Instagram

When you text someone to make plans, it should give you the % of the time person flakes

This is a really interesting, purely AI driven note on theoretical physics. It can't go to arXiv or ssrn: we should have an online repository for purely AI written papers

Bullish for the case that hyperscaler cap ex will pay off

A week later, I'm still thinking about NHJ's article on NYC schools. It was courageous but a huge missed opportunity to call for real reform. She blames school choice, inequality, segregation, the wealthy and herself. But she seems reluctant to criticize the actors and policies implicated by the failures she documents, perhaps because those conclusions would be uncomfortable for many of her ideological allies. - She describes absentee teachers, poor instruction, unresponsive administrators, and students who graduate without mastering the material. But she never calls for greater accountability at the district, school, principal, and teacher levels. - She documents teachers failing to fulfill basic responsibilities but doesn't explore whether tenure and other employment protections allow chronic teacher absenteeism and poor performance to persist. - She laments the concentration of disadvantaged students but doesn't consider whether NYCPS should consolidate under-enrolled schools, thus allowing more resources towards instruction and increasing socioeconomic diversity. - She describes her daughter earning As in honors classes despite substantial gaps in her knowledge. Yet she doesn't consider the value of standardized testing as a check on grade inflation and identifying learning gaps before they compound. - She describes how experienced teachers choose to work in better schools but doesn't salute the districts that have had “reform superintendents” like DC, Dallas, Denver, and Houston that have used cash bonuses to incentivize the best teachers to work in the most disadvantaged schools. - She notes that eliminating homework harmed her daughter, but doesn't examine how the movement against homework is largely driven by equity advocates who argue that it can turn unequal home circumstances into unequal academic outcomes. - She condemns school choice yet uses it to secure a better school fit for her daughter, without noting it’s the only realistic escape valve for families who can’t move or afford private school. - She describes the “impossible balancing act” of teaching students at vastly different levels but doesn't explore how academic tracking can help students at both ends of the academic spectrum. - She describes disruptive students who harm the classroom environment but doesn’t ask for stronger disciplinary actions to protect other students. - She documents a school that lowered academic expectations in pursuit of equity but doesn't acknowledge how doing so perpetuates the very achievement gaps those policies seek to eliminate. Hannah-Jones’ story was powerful. She supplied the evidence for a broad examination of why schools are failing disadvantaged students. It could have been the strongest call in a generation for urban school district reform. Segregation and poverty are real obstacles. But they cannot become explanations that absolve everyone else of responsibility. We can’t wait to solve all societal issues before demanding higher performing schools.

Which spatial economist hasn’t wished for European micro-geographic house-price indices using consistent methods? A start: Germany + England & Wales (LSE-REEF index) in one dashboard. Send me your AHS index to add! sites.google.com/view/ahlfel… @LSEGeography

A sci fi novel in which all the kids *think* they are in the 90s, because this has been determined to be the optimal environment for raising them; then you grow up and it’s 2140 and a tech dystopia

Complete Becker theory of crime victory

In our recent Stripe Economics piece, we conclude that aggregate productivity growth is so far decent-not-miraculous & there's reason to be cautious that even that recent firming is about AI microproductivity gains. 1/2 stripeeconomics.com/p/ai-and…