Why Economics PhDs are so competitive

And how Picasso was like the Federal Reserve

Picasso was an artist…but he was also an economist. In the height of his fame, instead of paying for a purchase in cash, he would use checks. Rather than taking away his money, these checks created money as if he were his own Federal Reserve.

What was going on? Well, Picasso was so famous that his signature would often sell for more than the value written on the check. His bank account stayed large because the recipients refused to cash their checks, selling them instead.

This feels like NFTs today. NFTs are selling at crazy numbers—over the weekend an auction for an NFT linked to the first-ever tweet received a bid for $2.5 million.

What’s driving this market? In today’s video I explain some of the basic economics. But I’m possibly interested in doing more. Let me know what other questions you have about NFTs.

The Economics of a PhD in Economics

Why is it so hard to get accepted to an economics PhD program? Every year seasoned professionals give hard-to-swallow advice on how to get into PhD programs. Examples include, “Forget economics courses, just major in math”; “Publish research as an undergraduate”; “Take an RA position for a few years after graduating then apply.”

I asked a friend of mine who has a PhD in biology whether he got the same advice as an undergraduate. He said that most students can get into good programs if they follow a normal path through their undergraduate and demonstrate good performance. It sounded completely different from my experience.

So why is it so tough? Well, economics PhDs are a luxury good. Biology PhDs are money makers—research in those fields generates a lot of money, and a high-return way to spend it is through PhD students. Economics researchers, on the other hand, rely far less on grant money, and even when we do get grants we tend to hire RAs instead of students. Thus, while demand is high, supply does not respond and PhD spots are insanely competitive.

You can read more about the economics in this twitter thread by Jacob Vigdor.

Too Much Real Life in the Virtual Life

Something was wrong with the job. Kevin had a position that many envied, and his job led him to opportunities he never imagined he’d have. But it became monotonous. He was ready for change. With no notice, he left his job as a restaurant manager.

But the restaurant doesn’t exist. Kevin is the online avatar of Twitch streamer Sodapop, and the job existed in the virtual world of Grand Theft Auto (GTA). He quit his job on GTA because it was becoming too much like a normal job.

The story reminded me of this article about a shelf-stocking robot controlled through a virtual reality game. The article has a video and I can easily imagine a Ender’s Game-like future where teenagers get jobs virtually controlling robots.