David Price sends along this interview by Renee Haltom of Jesús Fernández-Villaverde. Lots of interesting stuff; I only wish there were more specifics on his empirical work:

In recent years, he has studied how politics determine macroeconomic outcomes, the rise of Nazi Germany, the enduring significance of the Magna Carta, and even how contraceptive technologies influence the way societies socialize children about sex.

I googled *Jesús Fernández-Villaverde Magna Carta* and found this:

This paper surveys the legal tradition that links Magna Carta with the modern concepts of the rule of law and the limits on government. It documents that the original understanding of the rule of law included substantive commitments to individual freedom and limited government. Then, it attempts to explain how and why such commitments were lost to a formalist interpretation of the rule of law from 1848 to 1939.

Hmmm . . . I always had the impression that, back in 1215, “individual freedom and limited government” was something for rich landowners, not the common people. I’m not saying that Magna Carta was bogus—I’ll take the historians’ word for it that it was an important step forward. It just seems like there’s such a gap between, on one hand, the idea of absolute monarchy, and the modern-day regulatory state, and it’s not clear to me how useful it is to try to put the individual freedom of medieval landowners dealing with a king on the same scale as the individual freedom of ordinary citizens or small business operators dealing with an elected government.

Unrelatedly, Fernández-Villaverde talks about his work on particle filtering, which is a simulation method sometimes used for difficult problems in statistics:

For the longest time the most important filter was the Kalman filter. It requires two assumptions: that the world is linear, and that noise comes from a normal distribution, or is “well behaved.” Those assumptions prevent it from handling many, many questions in macroeconomics. The best example is volatility because it can only be positive: You can have a lot of volatility or very little, but you cannot have negative volatility.

So when I was a graduate student, I was very interested in coming up with methods that could extend filtering to these types of environments. I spent a lot of hours browsing through math journals, and I heard about this new generation of methods called sequential Monte Carlo . . .

In the 1990s, some people came up with the idea of applying Monte Carlos recursively to filtering problems. I learned about these new methods, and I thought gee, this can be done in economics as well. So I came back to my office and got my dear friend and co-author Juan Rubio and I explained to him, “This can work,” and he said, “Yeah.” I said, “Well, let’s write a paper.” So we wrote the paper, my most-cited paper probably, and it still pays for my mortgage.

How does that work, exactly? Did he put his algorithm in some commercial software that’s been paying him royalties? I have no problem with that, I’m just curious how he made money from a published paper?