Ultimate confusion: The economics of Julian Simon

This article argues that there are profound mistakes and exaggerations in Simon's influential and popular ideas. It discusses Simon's denial of resource finitude and his views that neither ecology nor entropy exists. Finally it looks at Simon's The Resourceful Earth as an attack on Global 2000.     

Against free trade: Neoclassical and steady-state perspectives

The author argues against free trade as a default position for international trade. He shows that arguments for free trade based on comparative advantage do not hold in reality. First, free trade makes cost-internalization for single countries difficult leading to standard-lowering competition and misallocation. Second, the international mobility of capital leads to absolute rather than comparative advantage for single countries, thus leading to maldistribution. Finally, the ecological basis seriously limits the scope for catching-up. Priority should be given alternatively to domestic production of a steady-state type with balanced trade.     

Land Values: Size Matters

The Journal of Real Estate Finance and Economics - Using Clark County, Nevada land auction data from the Bureau of Land Management, we find evidence that the price paid per acre of land initially...     

Banking on the FED: QE1-2-3 and the Rebalancing of the Global Economy

Growing income inequality in most countries in the 1990s and 2000s led to a global shortfall between supply and demand. The US economy bridged this shortfall domestically and globally by blowing successive equity market and housing bubbles, but these produced ever more severe financial crises. Rebalancing after the 2008 crisis required trade surplus countries to expand their non-traded sectors, but rebalancing is never immaculate. Instead, the Federal Reserve Bank's three rounds of Large-Scale Asset Purchases, or quantitative easing, shifted investment flows towards some developed and developing economies. As a matter of accounting, capital inflows led to shrinking trade surpluses in those countries. However, their relatively undeveloped securities markets mean that rebalancing largely occurred through rising housing prices, mirroring the same unsustainable phenomenon the USA experienced in the 2000s. In effect, the USA shifted part of its unsustainably large non-traded sector back to trade surplus countries by causing the real-estate part of the non-traded sector in surplus countries to expand. However, this is not a sustainable solution to global trade and financial imbalances in the long run, and risks producing the same kind of crises the USA experienced in 2008.     

Has The Accuracy of Macroeconomic Forecasts for Germany Improved?

This study asks whether the accuracy of macroeconomic forecasts for Germany has improved over time. We examine one‐year‐ahead forecasts of rates of real GDP growth and inflation for the years 1967–2010, by three major German forecasters and the OECD. We find that overall error levels are high but not much different from those of the U.S. and U.K. In the 1980s and 1990s accuracy improved somewhat, but has now returned to its 1970s level, indicating that it reflects the variance of growth and inflation. Benchmark comparisons with these predictions with ex post forecasts of a macroeconometric model indicate that accuracy can be improved, but it will be difficult to achieve.     

An analysis of factors affecting access to credit in Lesotho's smallholder agricultural sector

The agricultural sector in Lesotho is underperforming mainly due to the inability of smallholders to move from traditional agriculture to a more scientific and technology-based one. Among the challenges inhibiting the ability of smallholders to make the step up is access to financial services, especially credit. The purpose of this study was to examine the factors that may influence the ability of smallholders to access finance by making use of a logistic regression model within the principle component regression framework. The results revealed that the ability of smallholders to access finance, and the potential to make the transition towards a more scientific and technology-based agriculture sector, is influenced by the level of farm and non-farm income, remittances and pension, farm size, availability of family labour, land ownership, savings and repayment ability. The results present important information in terms of guiding institutional arrangements needed to improve credit availability in Lesotho.