Archive for July, 2012

conversion of a global warming sceptic

Tuesday, July 31st, 2012

In a US newspaper opinion piece, Prof Richard Muller says: “Call me a converted sceptic.”

Muller leads the Berkeley Earth Project, which is using new methods and some new data to investigate the claims made by other climate researchers. ….

In a piece authored for the New York Times, Prof Muller, from the University of California, Berkeley, said: “Three years ago I identified problems in previous climate studies that, in my mind, threw doubt on the very existence of global warming.

“Last year, following an intensive research effort involving a dozen scientists, I concluded that global warming was real and that the prior estimates of the rate of warming were correct. I’m now going a step further: Humans are almost entirely the cause.” ….

Prof Michael Mann, director of the Earth Science System Center at Penn State University, said that there was “a certain ironic satisfaction” in seeing a study funded by the Koch Brothers “demonstrate what scientists have known with some degree of confidence for nearly two decades: that the globe is indeed warming, and that this warming can only be explained by human-caused increases in greenhouse gas concentrations”.

Ex-sceptic says climate change is down to humans“, BBC News, 30 July 2012.

Muller’s team of 10 scientists includes Saul Perlmutter, who shared the 2011 Nobel Prize in Physics with two other physicists. Their funding came in part from the Koch brothers, billionaire US industrialists who contribute large sums to organisations lobbying against acceptance of human-caused global warming.

The full text of Muller’s op-ed can be downloaded here.

The report of the Berkeley Earth Land Temperature Project, “A New Estimate of the Average Earth Surface Land Temperature Spanning 1753 to 2011”, can be downloaded here.

Below is a chart, from page 7 of the report, showing 10-year moving averages of estimated land surface temperatures. The shaded areas are one- and two-standard deviation uncertainties.

 

Robert Shiller on financial innovation

Monday, July 30th, 2012

Yale University economist Robert Shiller defends the social value of financial innovation, in a Vox Talks interview recorded in May 2012. He surprised me with a Panglossian response to the following two questions.

RV: You’ve described a couple of financial innovations [the benefit corporation and the social impact bond] that have a really pro-social motivation. But when a lot of people think of financial innovation they think of specific things like collaterised debt obligations and credit default swaps and the kinds of things that people think contributed to the crisis.

Shiller: Collateralised debt obligations are a source of problems because they were flawed and they did help worsen the crisis. But I think collateralised debt obligations are in the same category as the things I just mentioned. What they do is they make it easier for people to buy a house. What they do is they take mortgages and package them, and then they split them up into tranches, and they have a triple-A tranch which is thought to be safe. It wasn’t, as it turned out, but next time they’ll get the problems ironed out and it will be. So they

Eurozoners

Saturday, July 28th, 2012

What should we call inhabitants of the eurozone? ‘Europeans’ cannot be correct, because not all Europeans use the euro as their currency.

Carleton University economist Nick Rowe has a suggestion: Eurozoners. Sounds good to me.

This problem may not last for long, however. See:

Nick Rowe, “Kill the Euro now?“, Worthwhile Canadian initiative, 26 July 2012.

universal transfers versus targeting

Saturday, July 28th, 2012

A recent World Bank working paper asks “Should cash transfers be confined to the poor?”, and answers with a resounding “Yes!” The authors would vote for Manchester University economist Armando Barrientos in my debate with him at Deutsche Bank

average hours of work

Friday, July 27th, 2012

Further to yesterday’s post, BBC News two months ago posted a chart based on figures that were gathered by the Organisation for Economic Co-operation and Development (OECD) from its 34 members. Comparison of working hours for a larger number of countries is difficult because of the lack of comparable data.

 

 

The full OECD data for 2000-2011 can be downloaded here.

Wesley Stephenson of BBC radio’s More or Less programme does an excellent job explaining what these numbers mean.

A look at the average annual hours worked per person in selected countries [those of the OECD] puts South Korea top with a whopping 2,193 hours, followed by Chile on 2,068. ….

“Over the last century, you’ve seen a reduction from very long working hours – nearly 3,000 a year at the beginning of the 1900s – to the turn of the 21st Century when most developing countries were under 1,800 hours,” says [Jon] Messenger [an ILO expert on working hours]. ….

The drop in working hours is in part a reflection of the greater number of part-time workers in the developed world. A large number of part-time workers brings down a country’s average – in the case of Japan, for example, a high proportion of people work excessive hours, but many also work part-time, leaving the country in the middle of the table, with 1,700 hours. ….

Messenger says the average Briton works 150 fewer hours than an American.

“The difference is really driven by the fact that the US is the only developed country that has no legal or contractual or collective requirement to provide any minimum amount of annual leave,” he says.

The UK, in contrast, is subject to the European working time directive, which requires at least four weeks of paid annual leave for every employee.

Wesley Stephenson, “Who works the longest hours?“, BBC News, 23 May 2012.

 

idleness and economic crisis

Wednesday, July 25th, 2012

Economic crises bring forth a great deal of nonsense. One of the most frequent bits of such nonsense is the idea that the countries in crisis in the eurozone are full of idle people, while the countries that are not in crisis are full of hard-working ones.

This, it so happens, is the reverse of the truth. Indeed, if one went by the hours worked on average by each worker, one would conclude that the fewer hours

the falling euro

Wednesday, July 25th, 2012

In the past year, the euro has fallen from US$1.44 to less than US$1.21. Harvard economist Martin Feldstein would like to see it fall further, to near parity with the US dollar. The euro would still be above its historic low of 84 US cents, and depreciation would provide a much needed boost for Spain and other troubled eurozone economies. I agree.

A lower value of the euro would reduce the prices of eurozone exports and raise the cost of imports, reducing or eliminating the current account deficits of the peripheral European countries, since about half of their trade is with countries outside the eurozone. The weaker euro would also boost Germany

reverse mortgages

Wednesday, July 25th, 2012

Timothy Taylor discusses the good, bad and ugly aspects of reverse mortgages. His conclusion?

My first instinct is to have rules about providing information accurately, and then to let people make their own financial choices. But I’ve also seen my own grandparents, as well as aging relatives of my friends, reach an age where they would have been quite vulnerable to someone telling them “the smart thing to do” and offering the siren call of a large check that wouldn’t ever have to be repaid. The reverse mortgage market is likely to grow rapidly as the boomers age. It’s going to offer a useful product for many, and some ugly scandals and frauds for others.

Timothy Taylor, “Reverse Mortgages“, Conversable Economist, 24 July 2012.

Reverse mortgages are home loans intended for older homeowners who require assistance to continue to live in their own home. The proceeds can be taken as a lump sum, or in monthly withdrawals. Payment of the loan is deferred until a borrower dies, sells, or moves out of the home.

Timothy links to a thorough Report to Congress on Reverse Mortgages (Consumer Financial Protection Bureau, 28 June 2012). The Dodd-Frank Act authorizes the Consumer Financial Protection Bureau (CFPB) to regulate reverse mortgages, and this study was completed in preparation for the task.

Republicans and Democrats shift to the right

Tuesday, July 24th, 2012

[I]f the [Republican] party is to succeed, it is vital we focus like a laser on policies that … form the foundation of what has been the traditional Republican brand of conservatism, which falls in the centre-right segment of the political spectrum and aligns with our inherently centre-right nation. Today

the sloth of nations

Saturday, July 21st, 2012

There are nations where people are always on the go, according to studies published by the British medical journal the Lancet this week. Greece, Guatemala, India and Russia are such places. In these active societies, whatever their flaws, most citizens get enough exercise to prevent heart disease, diabetes and certain cancers. That means about two-and-a-half hours of moderate exercise or an hour of strenuous exercise per week. Other countries, such as the US, are more sedentary. And there is a group of countries that are astonishingly, self-destructively inert, where exercise seems to consist of squeezing the remote control and pulling the tops off of lager tins, where fewer than half of men and women fill their weekly quota of recommended movement. These countries include Argentina, Iraq, Japan, Malaysia, Saudi Arabia, and