(Roughly) Daily

Posts Tagged ‘Frank Ramsey

“We do not inherit the earth from our ancestors, we borrow it from our children”*…

… and the interest rate on that loan is rising.

There’s much discussion of what’s causing the sudden-feeling spike in prices that we’re experiencing: pandemic disruptions, nativist and protectionist policies, the over-taxing of over-optimized supply chains, and others. But Robinson Meyer argues that there’s another issue, an underlying cause, that’s not getting the attention it deserves… one that will likely be even harder to address…

Over the past year, U.S. consumer prices have risen 7 percent, their fastest rate in nearly four decades, frustrating households and tanking President Joe Biden’s approval rating. And no wonder. High inflation corrodes the basic machinery of the economy, unsettling consumers, troubling companies, and preventing everyone from making sturdy plans for the future…

For years, scientists and economists have warned that climate change could cause massive shortages of major commodities, such as wine, chocolate, and cereals. Financial regulators have cautioned against a “disorderly transition,” in which the world commits only haphazardly to leaving fossil fuels, so it does not invest enough in their zero-carbon replacements. In an economy as prosperous and powerful as America’s, those problems are likely to show up—at least at first—not as empty grocery shelves or bankrupt gas stations but as price increases.

That phenomenon, long hypothesized, may be starting to actually arrive. Over the past year, unprecedented weather disasters have caused the price of key commodities to spike, and a volatile oil-and-gas market has allowed Russia and Saudi Arabia to exert geopolitical force.

“This climate-change risk to the supply chain—it’s actually real. It is happening now,” Mohamed Kande, the U.S. and global advisory leader at the accounting firm PwC, told me.

How to respond to these problems? The U.S. government has one tool to slow down the great chase of inflation: Leash up its dollars. By raising the rate at which the federal government lends money to banks, the Federal Reserve makes it more expensive for businesses or consumers to take out loans themselves. This brings demand in the economy more in line with supply. It is like the king in our thought experiment deciding to buy back some of his gold coins.

But wait—is it always appropriate to focus on dollars? What if the problem was caused by too few goods? Worse, what if the economy lost the ability to produce goods over time, throwing off the dollars-to-goods ratio? Then what was once an adequate number of dollars will, through no fault of its own, become too many...

… if the climate scars on supply continue to grow, does the Federal Reserve have the right tools to manage? Stinson Dean, the lumber trader, is doubtful. “Raising interest rates will blunt demand for housing—no doubt. But if you blunt demand enough to bring lumber prices down, you’re destroying the economy,” Dean told me. “For us to have lower lumber prices, we can only build a million homes a year. Do you really want to do that?

“Raising rates,” he said, “doesn’t grow more trees.” Nor does it grow more coffee, end a drought, or bring certainty to the energy transition. And if our new era of climate-driven inflation takes hold, America will need more than higher interest rates to bring balance to supply and demand.

A provocative look at the tangled roots of our inflation, suggesting that “The World Isn’t Ready for Climate-Change-Driven Inflation,” from @yayitsrob in @TheAtlantic. Eminently worth reading in full. Via @sentiers.

* Native American proverb

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As we dig deeper, we might send carefully calculated birthday greetings to Frank Plumpton Ramsey; he was born on this date in 1903. A philosopher, mathematician, and economist, he made major contributions to all three fields before his death (at the age of 26) on this date in 1930.

While he is probably best remembered as a mathematician and logician and as Wittgenstein’s friend and translator, he wrote three paper in economics: on subjective probability and utility (a response to Keynes, 1926), on optimal taxation (1927, described by Joseph E. Stiglitz as “a landmark in the economics of public finance”), and optimal economic growth (1928; hailed by Keynes as “”one of the most remarkable contributions to mathematical economics ever made”). The economist Paul Samuelson described them in 1970 as “three great legacies – legacies that were for the most part mere by-products of his major interest in the foundations of mathematics and knowledge.”

For more on Ramsey and his thought, see “One of the Great Intellects of His Time,” “The Man Who Thought Too Fast,” and Ramsey’s entry in the Stanford Encyclopedia of Philosophy.

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“The seen is the changing, the unseen is the unchanging”*…

Pharmacist’s Spatula, by William Toogood Ltd, English

We start 2021 with three big milestones for the Science Museum Group Collection.

100,000 incredible objects now have a photograph online, the online collection regularly receives 100,000 views each month and we’ve just recorded 3,000,000 visitors since launching the website in late 2016.

Each time you visit our online collection you can see more than ever before. Almost a quarter of the remarkable objects we care for (24.9% or 105,715 objects to be exact) have a photograph online, with hundreds of new photographs added each month as we digitise our vast collection.

You can explore photographs of artworks, tools and video games, or items from astronomy, firefighting and printing to give a few examples from the collection…

n the past we’ve released digital tools to help you explore the collection, including our Random Object Generator, Museum in a Tab (a Google Chrome extension) and What the machine saw (a machine learning experiment). You can even add our objects to the popular game Animal Crossing.

However, it can be difficult to spot recently photographed objects in the collection. So today we have published a new tool to help you explore these new items.

Never Been Seen shows objects from the Science Museum Group Collection that have never been seen online before. Each time you refresh this webpage an object with zero views is shown, making you the very first person to see it…

The spatula at the top of this post is no longer in that category, as your correspondent has seen (and now shared) it. But there’s so much more! Explore as yet unnoticed items in the collection of the Science Museum (London): “Never Been Seen.”

* Plato

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As we uncover the unobserved, we might spare a thought for a man who saw much that had hitherto been unseen: Frank Plumpton Ramsey, a philosopher, mathematician, and economist who made major contributions to all three fields before his death (at the age of 26) on this date in 1930.

For more on Ramsey and his thought, see “One of the Great Intellects of His Time,” “The Man Who Thought Too Fast,” and Ramsey’s entry in the Stanford Encyclopedia of Philosophy.

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Written by (Roughly) Daily

January 19, 2021 at 1:01 am

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