Tuesday, 31 March 2015

End March Links

# The New Scientist says To save the rainforest, let the locals take control - I think there's a general principle involved with this local control issue

The Silk Road might have started as a libertarian experiment, but it was doomed to end as a fiefdom run by pirate kings

# My gut feel is that The Negative Way to Growth? by Nouriel Roubin [lowering rates should boost demand and hence inflation if run into supply constraints] is "more correct" than Doctrines Overturned by John Cochrane [given long run stability, low rates must be associated with low inflation, so perhaps central banks should be raising rates to get inflation away from zero]. Not saying Cochrane's made any sort of mistake in analysing the model, but I suspect the model is not a good map to the real world.

# Krugman learns something about reality from introspection in How negative can rates go?: we don't have to take the convenience values of cash or bank deposits into account once interest rates hit zero because at this point the marginal holder of cash or bank deposits is using them as a store of value rather than for their liquidity.

# I wanted to read this, I really did: The Paradox of Oil: The Cheaper it is, the More it Costs. But in the introduction it said: "it becomes clear that oil is a commodity that defies reductive analysis and which cannot be understood unless one looks through a multi-dimensional, interdisciplinary lens", and I gave up. To understand anything we need to reduce its description to its important features ("reductive analysis") - it's the only way to do it (other than simulating the real world over and over again to see how the full complex system behaves, i.e. conduct experiments, but this is often not possible). Obviously different people (especially from different disciplines) can disagree about which are the important features to consider. But this wishy-washy "we must think holistically and multi-dimensionally" pish is just an excuse for a non-rigorous verbal model (which is equally reductionist, but just not very good) to obscure more than it reveals.

# Climate change economics too often simply calculates the "social cost of carbon" and proclaims this to be the appropriate rate for a carbon tax. The impacts on incentives for replacement zero carbon infrastructure are rarely considered. So Adam Ozimek's thoughts in Dirty Energy Taxes And Clean Energy Innovation are important. However, I think the economies of scale and learning by doing points that he makes at the end are likely important enough to mean that his main point is not crucial though.

# The myth of Europe's little ice age

# Dr Jim Cuthbert on behalf of the Reid Foundation has the same concerns as me about the lack of tax hypothecation between whole UK and rUK/England following implementation of Smith proposals on further devolution to Scotland.

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