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September 19, 2014

Latest Posts from Economist's View

Latest Posts from Economist's View


Paul Krugman: Errors and Emissions

Posted: 19 Sep 2014 12:24 AM PDT

Don't pay any attention to "the prophets of climate despair":

Errors and Emissions, by Paul Krugman, Commentary, NY Times: This just in: Saving the planet would be cheap; it might even be free. But will anyone believe the good news?
I've just been reading two new reports on the economics of fighting climate change: a big study by a blue-ribbon international group, the New Climate Economy Project, and a working paper from the International Monetary Fund. Both claim that strong measures to limit carbon emissions would have hardly any negative effect on economic growth, and might actually lead to faster growth. This may sound too good to be true, but it isn't. These are serious, careful analyses. ...
Enter the prophets of climate despair, who wave away all this analysis and declare that the only way to limit carbon emissions is to bring an end to economic growth.
You mostly hear this from people on the right, who normally say that free-market economies are endlessly flexible and creative. But when you propose putting a price on carbon, suddenly they insist that industry will be completely incapable of adapting to changed incentives. Why, it's almost as if they're looking for excuses to avoid confronting climate change, and, in particular, to avoid anything that hurts fossil-fuel interests, no matter how beneficial to everyone else.
But climate despair produces some odd bedfellows: Koch-fueled insistence that emission limits would kill economic growth is echoed by some who see this as an argument not against climate action, but against growth. ... To be fair, anti-growth environmentalism is a marginal position even on the left, but it's widespread enough to call out nonetheless.
And you sometimes see hard scientists making arguments along the same lines, largely (I think) because they don't understand what economic growth means. They think of it as a crude, physical thing, a matter simply of producing more stuff, and don't take into account the many choices — about what to consume, about which technologies to use — that go into producing a dollar's worth of G.D.P.
So here's what you need to know: Climate despair is all wrong. The idea that economic growth and climate action are incompatible may sound hardheaded and realistic, but it's actually a fuzzy-minded misconception. If we ever get past the special interests and ideology that have blocked action to save the planet, we'll find that it's cheaper and easier than almost anyone imagines.

Links for 9-19-14

Posted: 19 Sep 2014 12:06 AM PDT

National Attitudes on International Trade

Posted: 18 Sep 2014 09:40 AM PDT

[Travel day -- heading south for the winter -- so just a few quick ones before hitting the road.]

Tim Taylor:

National Attitudes on International Trade: Americans, who are sometimes caricatured as being especially supportive of free trade, are actually among those most opposed. People from the low-income countries of the world, far from feeling oppressed by international trade, are often among its stronger supporters. The Pew Research Center has a new survey out--"Faith and Skepticism about Trade, Foreign Investment"--on the responses of people in 44 nations to questions about the effects and consequences of international trade. Here is a sampling of the evidence...

'What's So BadAbout Monopoly Power?'

Posted: 18 Sep 2014 09:39 AM PDT

At MoneyWatch:

What's so bad about monopoly power?: Google (GOOG) has been negotiating with European regulatory authorities since 2010 in an attempt to settle an antitrust case concerning its search engine, and its third attempt to settle the case has been rejected. Google may also face new antitrust problems over its Android mobile operating system, and it's not alone in facing tough antitrust scrutiny in Europe. Microsoft (MSFT) has also been the subject of a long-running battle in Europe over market dominance issues. But what's motivating this scrutiny from European regulators? What's so bad about a company amassing monopoly power? ....

[Also, from yesterday, What do economists mean by "slack"?]

Tax Cuts Can Do More Harm Than Good

Posted: 18 Sep 2014 09:39 AM PDT

More on the new work from William Gale and Andrew Samwick (I've posted on this before, but given the strength of beliefs about tax cuts, it seems worthwhile to highlight it again):

Tax Cuts Can Do More Harm Than Good: Tax cuts are the one guaranteed path to prosperity. Or so politicians have told Americans for so long that the claim has become a secular dogma.
But tax cuts can do more harm than good, a new report shows. It draws on decades of empirical evidence analyzed with standard economic principles used in business, academia and government.
What ultimately matters is the way a tax cut is structured and how it affects behavior. A well-designed tax cut can help increase future prosperity, but a poorly structured one can result in a meaner future with fewer jobs, less compensation and higher costs to society.
William G. Gale of the Brookings Institution, a nonprofit Washington policy research house, and Andrew Samwick, a Dartmouth College professor, last week issued the report, "Effects of Income Tax Changes on Economic Growth."
Gale said he expects emailed brickbats from those who have incorporated the tax cut dogma into their views without really understanding the issue. ...

Interview with Michael Woodford

Posted: 18 Sep 2014 09:39 AM PDT

From the Minneapolis Fed:

Interview with Michael Woodford: Columbia University economist on Fed mandates, effective forward guidance and cognitive limits in human decision making.

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