The W: A Weekly Reading List

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In this week’s edition…making a company memorable…the world’s leadership approval ratings…China leads the mobile payments race…how is history made…it’s hard to say goodbye…and more.

Have a great weekend.


Business & Economics

What macroeconomists actually do

But in very crude terms, a DSGE model contains equations representing individuals’ choices to consume and save; companies’ choices to produce and invest; and the central bank’s setting of nominal interest rates. Upon this skeleton, modelling choices can be added about all kinds of things (how companies set prices; how work and hiring decisions are made; other policy choices and so on). The model is solved or estimated as a complicated system of many equations, often requiring simulations, simplifications or shortcuts to approximate a solution. Much work in macroeconomics lies in refining the basic model to make it more fit for purpose. (Financial Times)


Breaking the Script: How Companies Can Make Themselves Memorable

Yes, it’s a huge impact. I think Disney is a master at it. One of the things to notice about the Disney experience is that moments really do matter, and peak moments matter. I love the roller coaster at Space Mountain; it’s probably my favorite roller coaster in the world. It’s a great roller coaster even if it weren’t enclosed inside a dome where it’s completely dark. They feature stars up on the roller coaster, so you feel like you’re zooming through the asteroids and narrowly dodging the meteors. It’s an amazing ride, but it takes 2.5 minutes. You spend 60 minutes waiting in line up to that point, but nobody remembers the wait in retrospect. You remember the 2.5 minutes of peak pleasure. When we’re designing experiences, we like to keep in mind that what we’re going for is not a 7 out of 10, not an 8 out of 10, but more like a 9 or a 10 out of 10. (Knowledge@Wharton)


Looking behind the numbers for US stock indexes

We find the same situation today. Four megacap companies—Amazon, Facebook, Google (Alphabet), and Microsoft—together valued at more than $2 trillion, account for 10 percent of the index and, as a group, trade at a PE ratio of 29.3 Excess cash among the remainder accounts for another $1.2 trillion. (The S&P 500’s total market capitalization at the time of this writing in December was $23.4 trillion.) Excess cash distorts the index because it generates very little in earnings, leading to an implied high PE multiple.4 This is the case with the unusually large levels of cash held by a number of companies today. Removing the four companies mentioned above from the calculation and adjusting for the excess cash that companies hold as they await changes to tax laws before repatriating foreign profits reduces the current PE ratio to 16.9 (Exhibit 1). This is much closer to the range typical in “normal” economic times such as the mid-1960s, the late 1980s and early 1990s, and the years 2003 and 2004, when the US economy was growing and inflation was under control. (McKinsey)


With Workplace Suicides Rising, Companies Plan for the Unthinkable

After the death, PwC helped employees share stories about anxiety and depression with one another and created a mobile app with information on mental-health resources. The company is aiming this year to train some 5,000 managers in signs that a co-worker is at risk and how to approach them about getting help. Mr. Barton said clients used to push back on including the topic of suicide in employee training. A common response, he said, was, “Do we really have to talk about this?” Now, many clients request the training. (The Wall Street Journal)


Geopolitics & World

The most valuable military real estate in the world

In the last century, conflict was carefully organized along clear borders and spheres of influence, but today, globalization has left rivals all jumbled together — and Djibouti is the perfect image of this new world, where major powers are forced to share the same space. “Around us you can draw a circle with eight military bases. We are completely surrounded. Most countries would find this strange, but for us …” Mohammed stopped for a moment. “I guess it is quite normal.” (Politico)


World’s confidence in leadership lies with Germany, China

The Gallup report said that China, which has overtaken the US as the leading trading partner in parts of Latin America, “may be positioned to take further advantage”. It’s approval rating across the Americas is four percentage points higher than the US, but disapproval is much lower at 35%. Many Latin Americans have not made up their minds about Chinese influence. (The Guardian)


Technology & Computing

The Mobile Payments Race: Why China Is Leading the Pack — for Now

Japanese experts agree with Cavender. Given the hard times the Japanese banking industry is facing thanks to the central bank’s negative interest rate policy and a shrinking local market, it’s unclear if the banks could be enticed to join forces with Alipay or WeChat in offering mobile payments unless it would pay off for them. The three megabanks — Mizuho Financial Group, Mitsubishi UFJ Financial Group and Sumitomo Mitsui Finance Group — are hurting badly enough that they are laying off retail staff and downsizing their domestic retail networks. “I wonder if there is any Japanese bank willing to cooperate with Chinese payment platforms that could take away some of their business,” says Tomoo Marukawa, a China industry and economy expert and professor at the Institute of Social Science at the University of Tokyo. “If they attempt to enter the Japanese market, there may be a negative campaign against them, saying they might leak your personal data for free,” Marukawa says. (Wharton)


It’s the Democracy-Poisoning Golden Age of Free Speech

In today’s networked environment, when anyone can broadcast live or post their thoughts to a social network, it would seem that censorship ought to be impossible. This should be the golden age of free speech. And sure, it is a golden age of free speech—if you can believe your lying eyes. Is that footage you’re watching real? Was it really filmed where and when it says it was? Is it being shared by alt-right trolls or a swarm of Russian bots? Was it maybe even generated with the help of artificial intelligence? (Yes, there are systems that can create increasingly convincing fake videos.) (WIRED)


Science & Nature

The Limits of Empathy

The authors of the 2014 study concluded that such negative stereotypes outweighed any kind of empathic warmth that the simulation might have also generated. Blind people don’t need warmth, they need people to respect them as fully functional individuals. What is far more effective at actually building respect and understanding for disabled people is face-to-face conversations with them. As Robert Yang, a video game designer, put it in a scathing 2017 critique of VR empathy experiences, “If you won’t believe someone’s pain unless they wrap an expensive 360 video around you, then perhaps you don’t actually care about their pain.” (Topic)


Will your baby like cilantro?

BabyGlimpse is one of the latest examples of a growing direct-to-consumer genetic testing industry aimed at new, expecting, and aspiring parents. Some, like BabyGlimpse, rely on a combination of each partner’s DNA. Others, like Orig3n’s Child Development test, collect spit or cheek swabs from the new kiddos themselves, and then work with labs to sequence, analyze, and interpret that genetic information. The companies behind these tests say they’re mostly for entertainment, and for educating folks about how genetics work. But doctors and public health officials have concerns that they might, in fact, do the opposite. (WIRED)


Art & History

You’re Descended from Royalty and So Is Everybody Else

This number may not feel right, and when I talk about it in lectures, it often results in a frown of disbelief. We’re not very good at imagining generational time. We see families as discrete units in our lifetimes, which they are. But they’re fluid and continuous over longer periods beyond our view, and our family trees sprawl in all directions. The concluding paragraph of Chang’s otherwise tricky mathematical and highly technical study is neither of those things. It’s beautiful writing, extremely unusual in an academic paper, and it deserves to be shared in full: “Our findings suggest a remarkable proposition: No matter the languages we speak or the color of our skin, we share ancestors who planted rice on the banks of the Yangtze, who first domesticated horses on the steppes of the Ukraine, who hunted giant sloths in the forests of North and South America, and who laboured to build the Great Pyramid of Khufu.” (Nautilus)


Want to understand how history is made? Look for the networks

For most of the 16th and 17th centuries, the main threat to that symbiosis came from the fanatical, intolerant and often bloodthirsty religious networks that devastated central Europe. For most of the 18th, 19th and 20th centuries it came from more or less brutal hierarchists—Peter the Great, Napoleon, Lenin, Stalin, Hitler, Mao Zedong, Pol Pot, Kim Il-Sung and the like. In his brilliantly provocative final chapters, Ferguson shows that the wheel has now come full circle. The frenzied religious networks of the 16th century flourished in what he calls the “first networked era”: the age ushered in by the astonishingly rapid diffusion of print technology all over Europe. Today, he argues, we are living in the second networked age. Ours is the age of the internet, of Tim Berners-Lee’s world wide web and giants such as Facebook and Google. The speedy diffusion of information that these websites facilitate allow individuals to form themselves into networks more easily, and more globally, than ever before. A development that is having profound consequences for once stable, or at least predictable, democracies. (Prospect UK)


The Pianist’s Loneliness

The life of the concert soloist is a strange calling, yet many concert pianists accept the loneliness as part of the package, together with the other accessories of the trade. The concert pianist experiences a particular kind of solitude (as noted by Stephen Hough in the quote at the beginning of this article). The solitude of travelling alone – the monotony of airport lounges, the Sisyphean accumulation of airmiles, nights spent alone in faceless hotels. Dining alone, sleeping alone, breakfast alone, rising early to practise alone. And there is the concert itself: waiting backstage, alone, in the green room, and then the moment when you cross the stage, entirely alone….. The pianist Martha Argerich has described the “immense” space around the piano that has always made her feel alone on stage. But it is this aloneness, this separation, which the solo pianist exploits for the purpose of captivating and seducing the audience, drawing them into his or her own private world for the duration of the performance. (The Cross-Eyed Pianist)


Culture, Media & Entertainment

Funerals for the 21st century: Asia’s new ways to say goodbye

The same is true across Asia, where families are changing the way they bury and honor their deceased loved ones amid rapid demographic change. About 60% of the world’s elderly population lives in the Asia-Pacific region, and by 2050 more than a tenth of the population will be 80 or older in Japan, Hong Kong, South Korea, Singapore and Thailand, according to United Nations data. As these populations age, centuries of funeral traditions are being upended due to lack of cemetery space, rising funeral costs and dwindling family sizes. (Nikkei Asian Review)


Two Lessons of the Urban Crime Decline

The everyday lived experience of urban poverty has also been transformed. Analyzing rates of violent victimization over time, I found that the poorest Americans today are victimized at about the same rate as the richest Americans were at the start of the 1990s. That means that a poor, unemployed city resident walking the streets of an average city today has about the same chance of being robbed, beaten up, stabbed or shot as a well-off urbanite in 1993. Living in poverty used to mean living with the constant threat of violence. In most of the country, that is no longer true. (The New York Times)


‘You Have to Be Violent’: NFL Defenders Feel Trapped in a War for Game’s Soul

“Putting somebody to sleep,” Dupree says. “One of my brothers got hurt? Now we need to hurt three of their brothers. So we’re going to hit them as hard as we can.” That snarl on Dupree’s lip, everyone’s lip, was instilled long ago. They all remember hitting drills with fondness—the Oklahoma drill, even Bull in the Ring. That’s the one that stripped football down to its raw, ruthless, inescapable core. As all-time Steelers badass Greg Lloyd explains, a youth coach placed you in a circle of teammates, secretly assigned those teammates a number and then shouted numbers aloud. Three! You were blasted in the back. Five! Just as you’re stumbling to two feet, you’re drilled from the side. Eight! Look out, a dude’s in your face. It was cruel. It was physically and mentally draining. It’s justifiably controversial. (Bleacher Report)



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