Model Thinking

Model Thinking explores innovative economic and political models to address global challenges, focusing on regulatory reforms, conflict resolution, migration policies, NATO's role in conflicts, the impact of political term lengths, population growth strategies, prison systems, and the implications of open borders on the economy and environment.

Economic Policy Political Strategy Migration Conflict Resolution National and International Security Population Growth Prison Reform Environmental Policy

The hottest Substack posts of Model Thinking

And their main takeaways

Insuring Progress

259 implied HN points • 07 Jan 24
💼 Business Regulation Innovation Costs Urban Development Technology
  1. Replacing process-based regulations with outcome-based regulations can help boost British growth in sectors like childcare, energy, and housing
  2. Introducing Mandatory Insurance Schemes in sectors with low-probability, high-downside events can incentivize safety compliance and ensure victims get compensated
  3. Outcome-based regulations can lead to cost-effective safety procedures, technological innovation, and more resilient policy reforms, thereby helping Britain move forward in various industries

Paying For Peace

239 implied HN points • 26 Mar 23
🌍 World Politics Conflict resolution Military Strategy Economic Impact International relations Peace negotiations
  1. One potential strategy to end the conflict between Russia and Ukraine is to pay Russian soldiers to surrender, offering significant sums of money and potentially EU citizenship for them and their families.
  2. Economist Bryan Caplan suggests that offering both payments and citizenship could be more effective in incentivizing soldiers to defect compared to just financial compensation.
  3. By estimating the impact and potential gains of implementing such a strategy, it is suggested that it could lead to a quicker end of the war, saving significant resources and lives, if successfully executed.

A New Atlantis

2 HN points • 01 Apr 24
💼 Business Housing Construction Economics Infrastructure Development
  1. Housing in Britain is currently unaffordable due to bloated planning restrictions, costing residents in terms of space, age of homes, and financial burden.
  2. The proposal to reclaim land from Dogger Bank for housing development comes with an estimated cost of £97.5bn, with potential present value benefits of £622bn, showing a promising cost-benefit ratio.
  3. The development of a new city on Dogger Bank has the potential to significantly impact economic activity, urban infrastructure, land prices, and GDP gains, making it a complex but potentially beneficial endeavor.

Prisons compared

39 implied HN points • 12 Feb 23
  1. Prisons have multiple effects like deterrence, incapacitation, rehabilitation, and criminogenic, but come at a high cost per prisoner-year.
  2. An alternative system with equal deterrence but no incapacitation, rehabilitation, or criminogenic component could be more cost-effective.
  3. Comparing systems for managing criminals should consider factors like recidivism rates, crime costs, and how age impacts benefits and costs.

NATO ascendant

39 implied HN points • 22 Jan 23
🌍 World Politics Military Alliances Warfare Economics Strategy
  1. NATO's support for Ukraine during the war against Russia is crucial for Ukrainian victory
  2. A model using Cobb-Douglas production function estimates Western support needed at maximum Russian mobilization to achieve objectives
  3. The model suggests Russian victory in Ukraine is highly unlikely, with NATO likely able to finance Ukrainian victory or stalemate at current front lines
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A slow tsunami

59 implied HN points • 11 Sep 22
🌍 World Politics Migration Economics Policy Population Growth
  1. Critics of open borders argue about moving costs, either saying they are too high or too low, but over time, open borders can have a positive impact.
  2. Existing examples show that migration patterns can change gradually, with diaspora reducing migration costs over time.
  3. A model for open borders suggests that allowing migration can lead to population growth without negatively impacting the destination country's institutions, potentially lifting billions out of poverty.

Assessing altruism

19 implied HN points • 09 Jul 23
🔬 Science Behavioral Economics Altruism Child development Economic Theory
  1. Intergenerational altruism in the Barro-Becker model may need to be as low as 0.09 for a stable solution, which seems paradoxical considering the proportion of a parent's and child's consumption.
  2. Potential explanations for this paradox include scale economies in household production, children being viewed as 'utility monsters,' and parents seeing children as a prestige good.
  3. The discrepancy in altruism values between parents and consequences may imply that individuals are not consequentialists and may prioritize existing utility over potential future utility.

Tsunami invariant

39 implied HN points • 18 Dec 22
🔬 Science Research Economics Immigration Policy Analysis
  1. This post explores how factors like remittances, capital stocks, and immigrant effects on productivity impact the population trajectory under open borders.
  2. The analysis shows that the case for open borders remains robust even with substantial negative impacts on productivity, suggesting significant population growth under various scenarios.
  3. Limitations of the model include the lack of consideration for certain effects on total factor productivity in origin countries and the absence of estimates on global welfare and utility changes due to migration.

Term time

39 implied HN points • 20 Nov 22
🇺🇸 U.S. Politics Policy Analysis Elections Government spending Accountability
  1. Politicians prioritize short-term gains for re-election over long-term investments due to the nature of regular elections.
  2. The optimal rate of investment for politicians is influenced by factors like capital elasticity and depreciation rates.
  3. Increasing political term lengths from 5 to 7 years could potentially boost real incomes significantly over a long timeframe, showing the impact of term lengths on economic outcomes.

A benefit greater yet

39 implied HN points • 06 Nov 22
💰 Finance Economics Population Government spending Healthcare Policy Analysis
  1. Optimal population subsidies can differ greatly based on the discount rate assumption, with the model showing notable variations between a 5% and a 7% discount rate.
  2. There's evidence of a non-linear relationship between fertility rates and income, with high-income groups having more children in some cases, impacting population growth predictions.
  3. The marginal benefit of a birth is suggested to increase rapidly with population growth and discounts rates, leading to implications concerning government spending priorities and possible optimization opportunities.

Innovative externality inclusion

19 implied HN points • 31 Dec 22
💼 Business Regulation Innovation Economics Welfare Globalization
  1. Regulation impacts economies with benefits like cleaner water but also drawbacks like slower innovation, affecting global progress.
  2. Small differences in economic growth rates have significant welfare implications, drastically altering living standards over time.
  3. The value of regulation changes when considering the impact on foreign welfare, potentially leading to a reevaluation of optimal levels.

A utopia suffocated by smog?

0 implied HN points • 09 Oct 22
🌞 Climate & Environment Global Emissions Environmental Impact
  1. Open borders could potentially boost global carbon emissions, impacting climate change and global wealth in the long run.
  2. Emissions per capita in developed countries like the UK are significantly lower compared to developing countries, even with higher GDP per capita.
  3. Assumptions about countries following net zero emissions pledges impact predictions on total global emissions, with open borders showing mildly negative effects on the environment.

Advantage diminishing

0 implied HN points • 04 Dec 22
💰 Finance Economics Trade Population Production
  1. Comparative advantage in economics explains why all countries benefit from trade, not just the most efficient ones. It also applies to trade between individuals.
  2. Visualizing comparative advantage on a production possibility frontier helps illustrate the maximum possible production of goods. It shows the optimal ratio of goods to produce and how diminishing marginal returns can limit the benefits.
  3. In determining optimal populations and trade decisions, the effects of comparative advantage may be near-insignificant with only two goods, but could be more substantial with a larger variety of goods. Free trade brings benefits beyond comparative advantage due to increased returns to scale.