Oil Prices Are Determined in the World Market
U.S. oil production is around 9 percent of world production. Even very large increases in U.S. production would have only a minimal effect on world oil prices, and therefore a minimal effect on the price of gas in the United States.
Thomas Friedman Goes Euphoric on Energy Production
Dean Baker comments on Thomas Friedman’s “vision” of US energy independence.
[I]magine that there were severe droughts in Africa and Asia that caused the world price of wheat to quadruple. Guess what would happen to the price of wheat in the United States? That’s right, it would also quadruple. The reason is that wheat producers would export their wheat to take advantage of the higher prices available elsewhere in the world, so we would have to match the world price in what we paid for the wheat consumed in the United States.
via Thomas Friedman Goes Euphoric on Energy Production | Beat the Press.
Counting the jobs lost to China
China’s entry into the World Trade Organization in 2001 was touted as a win-win development that would benefit both the U.S. and Chinese economies. Almost a decade later, it is clear that American workers have suffered significant losses. In a new paper, EPI International Economist Robert Scott calculates that 2.4 million American jobs were lost between 2001 and 2008 as a result of increased trade with China, and that those job losses have occurred in every U.S. state, Congressional district, and most industries.
The world economy: Three-way split
THIS year has turned out to be a surprisingly good one for the world economy. Global output has probably risen by close to 5%, well above its trend rate and a lot faster than forecasters were expecting 12 months ago. Most of the dangers that frightened financial markets during the year have failed to materialise. China’s economy has not suffered a hard landing. America’s mid-year slowdown did not become a double-dip recession.
Big Mac Index as a Proxy for Purchasing Price Parity
Purchasing Price Parity is an economic concept that allows us to compare across differently scaled economies. One way this is implemented is by a Big Mac Index, wherein parity is assessed by the price of a Big Mac in the countries being compared. One can even see how these countries change over time relative to each other.
A shorter video explanation can be found here. One can also see how long it takes to earn enough to buy a Big Mac in various countries to get a sense of local purchasing power.
Devil’s Bargain
Former President Bill Clinton apologises for insisting on trade policies that destroyed Haiti’s agricultural sector.
President Bill Clinton, now the UN Special Envoy to Haiti, publicly apologized last month for forcing Haiti to drop tariffs on imported, subsidized U.S. rice during his time in office. The policy wiped out Haitian rice farming and seriously damaged Haiti’s ability to be self-sufficient. On Wednesday, journalist Kim Ives of Haiti Liberté questioned Clinton about his change of heart and his stance on the return of ousted Haitian President Jean-Bertrand Aristide.
Should the US rethink its position on unfettered free markets, or do countries like Haiti simply need to focus on their comparative advantages?
How to Graph a Production Possibilities Frontier in Excel 2003
Here is a step-by-step tutorial showing how to create a Production Possibilities Frontier (Curve) in Excel 2003. The concept carries forward to creating a PPC in Excel 2007, too.
If you are reading this, I presume you know what a PPC is; you just want to know how to chart it. For those who somehow just stumbled here, I provide a concise definition.
A Production Possibilities Frontier is a graphical depiction of opportunity costs; given two competing possibilities, you must choose how you wish to allocate resources to make a determination of output, but as you move to increase one item, you must trade off some amount of the other item. The maximum (optimally efficient) production possibilities are captured by the (typically) concave curve, beyond which you do not have the resources to acheive and inside the curve. The actual combination of outputs depends on preferences, a decision beyond the scope of this example.
Open a blank Excel worksheet, and enter your data in separate columns for the two possibilities. Feel free to name the data in the top row. Note that one of your columns needs to be in ascending order, whilst the other needs to be in descending order. You may enter as few as 2 data points per item and as many as Excel allows. When you are done, highlight the data range, and invoke the Chart Wizard.
Do Safety Standards Matter?
Young Indian workers who grind the gemstones that go into jewelry work one of the most dangerous jobs in the world. The grinding process creates clouds of silica dust, which the workers breathe in, condemning them to early painful deaths of silicosis.
Reebok Pays Workers 10¢ per $80 NFL Jersey
An EG452 student found this AFL-CIO post when researching for an assignment. Is it fair that a worker earns only 10¢ for an $80 jersey—about 1/10 of 1 percent of the retail price? More information is available in this PDF.
leave a comment