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Showing posts from May, 2009

Real Climate Economics

Here's a very nice site for solid academic research on the economics of climate change. I'm kicking myself for overlooking this site in the past. One of these days I'm going to provide a series of links to articles to supplement the ones on this site.

Thoma on Foolish Consistency

Note to self: I really like this post by Mark Thoma. This is not an area I feel especially well equipped to speculate about. But, I will, if only to be able to look back years from now and laugh at how wrong I was. If the Republican party comes back, I believe it will look very different than it does today. A Cheney-Limbaugh led party seems incompatible with the rapidly changing demographics of the country. The change that would have to occur within the Republican party would be a transformation much larger than the usual swing of the pendulum. Indeed, I cannot imagine how the Republican party can reconcile all of its incompatible parts and weak power. Alternatively, the Republican party could die and the Democratic party could split. The difficult thing for me to see is how, going forward, just two parties can accommodate a number of hard-nosed factions: (1) libertarian free-market types who generally tend to be socially liberal; (2) the anti-homosexual, antiabortion religi

Finally we have direct talk of inflation targeting

While I'm no macroeconomist, I've read a lot of good macroeconomists, and this has made me question why explicit inflation targeting backed by unconventional monetary policy was not on the table like six months ago. Better late than never. Here are excerpts from the story at Bloomberg . What the U.S. economy may need is a dose of good old-fashioned inflation. So say economists including Gregory Mankiw , former White House adviser, and Kenneth Rogoff , who was chief economist at the International Monetary Fund. They argue that a looser rein on inflation would make it easier for debt-strapped consumers and governments to meet their obligations. It might also help the economy by encouraging Americans to spend now rather than later when prices go up. “I’m advocating 6 percent inflation for at least a couple of years,” says Rogoff, 56, who’s now a professor at Harvard University. “It would ameliorate the debt bomb and help us work through the deleveraging p

Moral Hazard for Journalists

Warning: this post is cynical in a very economist sort of way.... Edmund Andrews has a new book Busted: Life Inside the Great Mortgage Meltdown that details his personal credit crisis. Andrews, a New York Times journalist with a 120K/year salary, lost his home to foreclosure. His story is an open and heart-felt personal account of how he was swept up in the housing boom and got burned. To my way of thinking, I find his story rather incredible. Although it now seems rather common. Here is an excerpt from the book published in the New York Times magazine last Sunday. A series of quotes below should give you the basic idea: If there was anybody who should have avoided the mortgage catastrophe, it was I. As an economics reporter for The New York Times, I have been the paper’s chief eyes and ears on the Federal Reserve for the past six years. I watched Alan Greenspan and his successor, Ben S. Bernanke , at close range. I wrote several early-warning articles in 2004 about the sp

A follow up to NYT: Room for Debate

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Today's New York Times online Room for Debate , includes a forum on food prices, including yours truly. It's funny how when you see these things in print they somehow look different than when you wrote them. So, below I'm going to provide some context and a few details in case anyone finds the blizzard of seemingly inconsistent statistics quoted on Room for Debate a little confusing. There are zillion price indexes out there and here the hubbub is about the food component of the Producer Price Index (PPI), which is supposed to track wholesale prices. Note the PPI tracks goods at all stages of processing. Here's a link to a table with some recent numbers from the PPI. It is important not to confuse the PPI with either the CPI or the prices raw commodities. The CPI (Conumer Price Index) tracks prices of things we actually buy and is the standard measure for inflation. Here is a fantastic interactive graphic at the New York Times that shows all the tiny pieces o

The crux of the climate issue: China

It's nice to see Paul Krugman write more about climate change. True to form, his column today incisively cuts to the heart of the biggest challenge, in this case what to do about growing emissions from China. It also made me think of a colleague Max Auffhammer who, along with Richad Carson, was first to sound the alarm that CO2 emissions in China were growing far faster than most had thought . This is going to be a long and difficult road.

How agricultural policy got into the business of conservation

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I'm writing a report on different mechanisms governments or others might use to buy conservation services from farmers. That is, how they might go about paying farmers not to plant crops and instead establish grasses, legumes, or trees, or alternatively pay farmers to manage their farms in ways such that they do less environmental damage. Feel free to rant in the comment section about your views on all this. Anyway, in putting this together I stumbled upon this classic USDA report by Bowers, Rasmussen, and Baker that gives a fairly comprehensive history of agricultural support programs from 1933 through 1984. It seems agricultural policy got into the conservation business very early on. This followed not from environmental concern (no surprise there) but from the Supreme Court ruling in the case United States v. Butler et al. (297 U.S. 1, January 6, 1936). From Bowers, Rasmussen, and Baker: The Supreme Court's ruling against the production control provisions of the Agr

Are Red States Less Organic than Blue States?

Hannah Fairfield of The New York Times presents us with a map showing the locations of the nation's 10,159 organic farms . (Note, that's less than 1/2 of one percent of all U.S. farms, as USDA defines them.) Fairfield writes: The map of organic farms in the United States is clustered into a few geographic centers, a strikingly different pattern than the map of all farms, which spreads densely over many regions. It's nice to see agriculture get good billing from the Times. Catherine Greene, cited by Fairfield, is an old friend of mine from USDA--we used to work in the same branch. She is probably the nation's foremost expert on organics and an important reason why statistics on organics are collected in the first place. But these maps and Fairfield's quote are at least somewhat misleading--it's hard to tell how much. The impression given is that we Southerners don't like organics as much as the rest of the country and that's why there's less prod