Climate change and wars

Michael Roberts Blog

As the ugly war in Ukraine drags on, with more lives lost and atrocities (apparently) committed, energy and food prices hit yet more highs. The Food and Agricultural Organisation (FAO) of the UN publishes a monthly global price index. The FAO Food Price Index reached yet another record high of 159.3 points in March, up 12.6% from February.

FAO Food price index

Oil and gas prices are also near all-time high levels. In Europe, gas prices hit a record €335 per megawatt hours, and at that level, it is now cheaper for some power stations to burn coal rather than gas even when the cost of carbon permits is taken into consideration. Europe wants to follow NATO’s bidding and cut back on Russian energy imports. The irony is that some countries, like Italy, say that will need to burn more coal, in order to burn less Russian gas. The International…

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Energy is getting cheaper (cost price). But: who profits?

Free to trade efficiency?

The importance of whole systems analysis in economics

I was reminded by Michael Pettis’ most recent blog post of the importance of taking into account the global economy as a whole when analysing national economies.

Challenging Osborne’s new economic ‘plan’

In today’s Guardian newspaper, 77 economists have signed a letter sharply criticising the UK chancellor’s plan to enshrine in law that the government must run budget surpluses in ‘normal’ economic times.

Binding fiscal policy

The UK chancellor, George Osborne, today announced that he intends to legally bind current and future governments to running a budget surplus (an excess of tax receipts over spending) when the economy is growing. Does this make sense? The answer must be no.

Germany: the key to sustained recovery in the eurozone

Economic growth in Germany apparently slowed to just 0.3% in the most recent quarter, and performance across the Eurozone, while positive, remains sluggish. Despite a weaker euro, which should boost net exports for the region as a whole, and the quantitative easing policy of the European Central Bank (ECB), this is bad news.

Change afoot in China

As many economists have argued, the structure and evolution of China’s economy has a huge impact on the global economy, and its very high rate of investment, with overall saving even higher, especially in the run-up to the global financial crisis, was part of the cause of the imbalances that contributed to that crisis.

Social welfare and macroeconomic performance

The political left is usually a strong supporter of the welfare state, as it believes that it provides social insurance to the population at large, and aims to benefit those most in need, even if outcomes sometimes fall short. In this way it is thought to reduce poverty and inequality and increase social justice. Those on the right tend to be less enthusiastic.

Continued recovery and disguised unemployment

So we have a Conservative government with an overall parliamentary majority: a most unexpected outcome in yesterday’s general election. One of the challenges facing the new administration will be to try to ensure that economic recovery continues, creating more jobs and raising wages for the majority, rather than simply those at the top of the income distribution.