Monday, December 28, 2015

Planetary boundaries: Guiding human development on a changing planet

The relatively stable, 11,700-year-long Holocene epoch is the only state of the Earth System (ES) that we know for certain can support contemporary human societies. There is increasing evidence that human activities are affecting ES functioning to a degree that threatens the resilience of the ES—its ability to persist in a Holocene-like state in the face of increasing human pressures and shocks. The Planetary Boundary (PB) framework is based on critical processes that regulate ES functioning. By combining improved scientific understanding of ES functioning with the precautionary principle, the PB framework identifies levels of anthropogenic perturbations below which the risk of destabilization of the ES is likely to remain low—a “safe operating space” for global societal development. A zone of uncertainty for each PB highlights the area of increasing risk. The current level of anthropogenic impact on the ES, and thus the risk to the stability of the ES, is assessed by comparison with the proposed PB

Steffen et al Science 2015 http://www.sciencemag.org/content/347/6223/1259855.short

Monday, December 7, 2015

Saturday, December 5, 2015

Restarting the global economy

Three areas of concerted public action — boosting global demand (with an emphasis on investment and essential services), unblocking the flow of surplus funds towards unmet investment needs, and mitigating rising inequality — are mutually reinforcing. The analytical arguments behind them are strong. Public policy solutions are possible to deal with many economic challenges if political consensus can be achieved on tackling them, both nationally and globally


Restarting the global economy: Three mismatches that need concerted public action 

Michael Spence, Danny Leipziger, James Manyika, Ravi Kanbur




Wednesday, October 28, 2015

Review of Earth Economics

Overall, Earth Economics is an excellent source as an alternative introduction to macroeconomics. It can also assist scholars who want to study the subject from a more diverse and less mainstream angle. The book does great work in interlacing economic models, real world data and policy discussions, into a comprehensive, if unconventional, macroeconomics book.

See the full review by Marco Scagliusi, (United Nations ESCAP) here

Sunday, September 27, 2015

Nominal global recession in IMF data

Data for the world economy in the data base of the World Economy show a nominal decrease in Gross Planet Product in 2015. This contradicts the estimates for real growth and inflation (both 3%) that would be consistent with a nominal GPP growth of 6%. The inconsistency may be due to the fallacy of composition or to underlying country assumptions that are too optimistic or may reflect measurement error or wrong aggregation.

Thursday, August 20, 2015

It Ain't Over Till it's Over: A Global Perspective on the Great Moderation-Great Recession Interconnection



FABIO C. BAGLIANO, University of Turin - Department of Economics and Statistics, Center for Research on Pensions and Welfare Policies (CeRP), Collegio Carlo Alberto
Email: fabio.bagliano@unito.it
CLAUDIO MORANA,
Università di Milano Bicocca, University of Milan, Bicocca - Department of Economics, Quantitative Methods and Business Strategies (DEMS), Center for Economic Research on Pensions and Welfare Policies (CeRP)
Email: claudio.morana@unimib.it
A large-scale model of the global economy is used to investigate the structural determinants of the Great Moderation and the transition to the Great Recession (1986-2010). Beside the global economy perspective, the model presents the novel feature of a broad range of included financial variables and risk factors measures. The results point to the relevance of various mechanisms related to the global monetary policy stance (Great Deviation), financial institutions' risk taking behavior (Great Leveraging) and global imbalances, in shaping aggregate fluctuations. The paper finally contributes to the literature on early warning indicators, assessing the information content of risk factor innovations for the prediction of the timing and depth of the Great Recession. 

Book: 

Thursday, May 21, 2015

Saturday, April 25, 2015

Giffen Behavior

A recent article in Oceanography "Evolutionary Control of Economic Strategy in Fishes: Giffen Behaviour could be a Common Economic Strategy on the Earth?"  by Eduardo Costas, Beatriz Baselga-Cervera, Camino García-Balboa and Victoria Lopez-Rodas quotes an article that I published with Charles van Marrewijk (Giffen Goods and the Subsistence Level, History of Political Economy (1990) 22 (2), pp. 145 148). The article in Oceanography provides an unexpected link to Earth Economics
The existence of Giffen behaviour (i.e. the opposite situation to the Law of Demand in which consumers respond to a rising price of a certain good by demanding more of it) associated with poor consumers is one of the major controversies in economics. However, economists rarely consider that nothing makes sense except in light of evolution. In this paper, we prove the existence of Giffen behaviour in animals that exhibit no intelligent reasoning. Sardines feed on phytoplankton, and zooplankton. If the amount of phytoplankton is greater than zooplankton, then Sardines fit the Law of Demand, but if the amount of phytoplankton is smaller, the Sardines apparently show Giffen behaviour. Evolutionary population genetics models show that Giffen behaviour has more adaptive value than follow the Law of Demand under resource scarcity. Since overwhelming animal species live in poverty, Giffen behaviour may be the common economic strategy on the Earth.

Thursday, February 12, 2015

Equitable Representation in Councils: Theory and an Application to the United Nations Security Council



Matthew Gould and Matthew Rablen develop a theoretical framework for equity in council voting games (CVGs). In a CVG, a fully representative voting body delegates decision-making to a subset of the members, as describes, e.g., the United Nations Security Council (UNSC). A general framework for analysing country- and region-level equitability in councils is developed under alternate assumptions regarding preference correlation and differing ex-ante and ex-post notions of equity. Allowing for a ternary set of voting possibilities in the council, we use our framework to evaluate the equitability of the UNSC, and the claims of those who seek to reform it. 


available at http://wp.peio.me/wp-content/uploads/PEIO8/Gould,%20Rablen%2018.11.2014.pdf

Book: chapter 14