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Posts tagged with "europe"

Jan 15

The Costs Remain the Same…

It seems energy production in the US (and around the world) is becoming more expensive. Secondary and tertiary processes are needed now to attempt to keep up with global demand for fossil-based fuels. And from what I’m seeing reported by the Economist and elsewhere, is that we’re consuming faster than production — which includes not only extraction, but transportation and refinement. The lack of refining capacity world-wide is one major factor why the US has become a net exporter of refined oil products. 

Yet, it doesn’t seem price really reflects all this. Sure, there’s the slight upward bumps in price during the summer when oil refinement production in the US switches from gasoline to heating oil. But where are the additional costs associated with fracking? With tar sands extraction? With litigation costs due to pollution? There are a ton of additional costs — because the act of extraction is becoming more expensive — that simply isn’t reflected in the price to consumers and industrialists. European prices seem more in line with actual costs.

So, when we finally square all the real costs associated with fossil-based fuels and create a realistic picture of the price, are we getting closer to price parity with different alternative fuels?

EPA Sees Risks to Water, Workers In New York Fracking Rules

New York’s emerging plan to regulate natural gas drilling in the gas-rich Marcellus Shale needs to go further to safeguard drinking water, environmentally sensitive areas and gas industry workers, the U.S. Environmental Protection Agency has informed state officials.

Posted 1 month ago

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31 notes

alternative fuel, economics, fossil fuels, oil, europe, epa, prices,

Dec 23

China Housing Bubble Has Burst

Oooh… It’s about to get interesting in China. Looks like the housing bubble there has started to burst. Developers have built up a huge inventory on unsold properties, and have started massive discounts. Prices are dropping, and they’re going to continue to drop fast. What makes this different from the US is that it’s inventory-driven, not buyer income or foreclosure driven (although some massive drops in certain areas have triggered localized credit crises). Also unlike the US, the global ramifications will be based on materials trade, not with the financial sector like US bad mortgages. 

“Real estate woes are already sending shockwaves through China’s broader economy. Chinese steel production — driven in large part by construction — is down 15 percent from June, and nearly one-third of Chinese steelmakers are now losing money. Chinese radio reports that half of all real estate agents in the southern city of Shenzhen have closed up shop. According to Centaline, more than 100 local government land auctions failed last month, and land sale revenues in Beijing are down 15 percent this year. Without them, local governments have no way to repay the heavy loans they have taken out to fund ambitious infrastructure projects, or the additional loans they will need to keep driving GDP growth next year.”

Possible good news for the US is that more raw production materials will be freed up globally for more competitive pricing. That’ll help temper our strengthening dollar with imports.

“The impact of a housing downturn would have a significant impact globally. International suppliers who have been fueling China’s construction boom — iron-ore miners in Australia and Brazil, copper miners in Chile, lumber mills in Canada and Russia, and multinational equipment makers such as Caterpillar and Komatsu — could be hard hit. Heavy losses on real estate and related lending could damage investment and consumer confidence, undermining the rising tide of Chinese demand that has been a much-needed growth engine for everything from Boeing airplanes to Volkswagen and GM automobiles to KFC and McDonald’s fast food.”

China’s Real Estate Bubble May Have Just Popped - Foreign Affairs

For years analysts have warned of a looming real estate bubble in China, but the predicted downturn, the bursting of that bubble, never occurred — that is, until now. In a telling scene two months ago…

Posted 2 months ago

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16 notes

China, economy, housing, bubble, international trade, europe, United States, finance,

Jul 23
Does Immigration Lead to Higher GDP? A couple weeks ago, a friend of a friend and I had a “friendly” discussion on the status of European immigrants. His comment about Germany’s high net immigration piqued my curiosity and so I did some additional research. Turns out that Germany does have roughly 9% net immigration; however, this doesn’t tell the whole story. Net immigration is the total of immigrants minus emigrants: total people coming into the country minus total people leaving the country. Germany’s actual immigration numbers were roughly 12.5% of the population, meaning they also lost roughly 3-4% of their population to people leaving. However, that still wasn’t the whole story, because this individual and I were talking about immigrants from outside of Europe (e.g., North African Arabs, Southeast Asians, etc.). The European Union allows citizens from within EU countries to move about, so a Greek who moves to Germany is considered an immigrant. This can skew the numbers, since it’s similar (but not exactly) like saying someone who moves from California to New York is an immigrant. Europe’s non-European immigrants average about 3-4% (Spain and Portugal have much higher numbers due to their proximity to North Africa). Various countries in Europe have seen nationalistic uprisings over the past decade, and have really intensified since the 2005 race riots in France. France, Italy, Germany, Denmark, Norway, and a slew of others have seen nationalists win elections into their Parliaments and local governments. Polling seems to indicate a strong anti-Muslim backlash, and there is a false sense of the “Islamification” of Europe. Even the recent tragedy in Oslo, Norway has an anti-Muslim tint to it, since the alleged bomber/shooter has strong nationalistic, anti-Muslim ties. So, my question was: Do immigrants create any benefit to these countries? In the United States immigration has historically been used for economic growth. The Chinese built our railroads. The Irish and Italians built our cities. Even now we see a strong push for Asian and Central Asian immigrants for high-technology positions. And at the opposite end of the spectrum we see the effects of cheap Hispanic labor in agriculture and construction. Still, even the United States experiences anti-immigrant sentimentality (even going so far back as the Potato Famine and Irish immigrants). Just to check out my idea that immigration actually does help grow an economy I ran some numbers from the World dataBank and their World Development Indicators. Specifically, I ran numbers for different aggregate regions, their GDP per Capita (at constant 2000 dollars), and their immigrant population as a percentage of their total population. I used a time spread of 1975-2005 at five-year increments, because migrant data is reported every five years and 2010 GDP per Capita wasn’t available. The picture attached is a screenshot of the scatterplot and trendlines. The PDF that I created is on Google Docs, and is available for Public. Here’s a quick primer about GDP per capita for my non-economic friends. GDP per capita is the average of the total income/wealth of a country divided by the total number of people. GDP, or the Gross Domestic Product, is used pretty universally by economists to compare different countries in their state of development. The higher the GDP, the more money and assets the country has. The United States, for example, had a GDP of $14.7 trillion in 2010. China’s GDP in 2010 was $5.98 trillion. The problem with GDP per capita is that it’s not a very good benchmark for quality of life when it’s used to compare the average citizen of two different countries. Although China’s $5.98 trillion seems large, when averaged over its 1.4 billion people it’s only about $8,000 per capita. Compare that to the U.S.’s $14.7 trillion against approximately 360 million people and GDP per capita is $47,200. Another way to look at it: you have Country A and Country B, both with 100 citizens. Country A has 1 person earning $1,000,000, and 99 people who earn $zero. GDP is $1 million, and GDP per capita is $10,000. Country B has a GDP of $500,000, all 100 people earns $5,000 which makes their GDP per capita only $5,000. So, which country is worse off? Which country’s citizens is worse off? It’s not perfect, but unfortunately GDP per capita is the best we have to compare countries and their well-being. So, here are some interesting correlations. First, rich-world developed areas (North America, Europe in general, and the European Union) all have strong positive correlations. Second, very poor areas (Sub-Sahara Africa, North Africa, and the “Arab World”) that have moderate immigrant percentages but flat correlations. Third, Latin America and East Asia have slightly higher GDP per capita, yet no discernible or even negative correlations. The World, as an aggregate, seems to show a positive correlations on par with rich world, developed nations. These results leave me with more questions than answers (which is the fun part, I must admit). What is the direction of the rich world positive correlation? Is GDP per capita higher because of our efficient use of immigrants? Or, do we have more immigrants because of the higher GDP per capita? How would East Asia look if I teased out China and Japan? Is the loss of GDP per capita in Latin America and Africa due to their emigrations to the US and Europe? Are there institutions involved that makes immigrants in the Arab World less efficient, even though they are notorious for higher levels of migrant construction labor? What are some other factors that may keep lower per capita countries from experiencing positive correlations? I’m curious to your thoughts. 

Does Immigration Lead to Higher GDP?

A couple weeks ago, a friend of a friend and I had a “friendly” discussion on the status of European immigrants. His comment about Germany’s high net immigration piqued my curiosity and so I did some additional research. Turns out that Germany does have roughly 9% net immigration; however, this doesn’t tell the whole story. Net immigration is the total of immigrants minus emigrants: total people coming into the country minus total people leaving the country. Germany’s actual immigration numbers were roughly 12.5% of the population, meaning they also lost roughly 3-4% of their population to people leaving.

However, that still wasn’t the whole story, because this individual and I were talking about immigrants from outside of Europe (e.g., North African Arabs, Southeast Asians, etc.). The European Union allows citizens from within EU countries to move about, so a Greek who moves to Germany is considered an immigrant. This can skew the numbers, since it’s similar (but not exactly) like saying someone who moves from California to New York is an immigrant. Europe’s non-European immigrants average about 3-4% (Spain and Portugal have much higher numbers due to their proximity to North Africa).

Various countries in Europe have seen nationalistic uprisings over the past decade, and have really intensified since the 2005 race riots in France. France, Italy, Germany, Denmark, Norway, and a slew of others have seen nationalists win elections into their Parliaments and local governments. Polling seems to indicate a strong anti-Muslim backlash, and there is a false sense of the “Islamification” of Europe. Even the recent tragedy in Oslo, Norway has an anti-Muslim tint to it, since the alleged bomber/shooter has strong nationalistic, anti-Muslim ties.

So, my question was: Do immigrants create any benefit to these countries? In the United States immigration has historically been used for economic growth. The Chinese built our railroads. The Irish and Italians built our cities. Even now we see a strong push for Asian and Central Asian immigrants for high-technology positions. And at the opposite end of the spectrum we see the effects of cheap Hispanic labor in agriculture and construction. Still, even the United States experiences anti-immigrant sentimentality (even going so far back as the Potato Famine and Irish immigrants).

Just to check out my idea that immigration actually does help grow an economy I ran some numbers from the World dataBank and their World Development Indicators. Specifically, I ran numbers for different aggregate regions, their GDP per Capita (at constant 2000 dollars), and their immigrant population as a percentage of their total population. I used a time spread of 1975-2005 at five-year increments, because migrant data is reported every five years and 2010 GDP per Capita wasn’t available. The picture attached is a screenshot of the scatterplot and trendlines. The PDF that I created is on Google Docs, and is available for Public.

Here’s a quick primer about GDP per capita for my non-economic friends. GDP per capita is the average of the total income/wealth of a country divided by the total number of people. GDP, or the Gross Domestic Product, is used pretty universally by economists to compare different countries in their state of development. The higher the GDP, the more money and assets the country has. The United States, for example, had a GDP of $14.7 trillion in 2010. China’s GDP in 2010 was $5.98 trillion. The problem with GDP per capita is that it’s not a very good benchmark for quality of life when it’s used to compare the average citizen of two different countries. Although China’s $5.98 trillion seems large, when averaged over its 1.4 billion people it’s only about $8,000 per capita. Compare that to the U.S.’s $14.7 trillion against approximately 360 million people and GDP per capita is $47,200.

Another way to look at it: you have Country A and Country B, both with 100 citizens. Country A has 1 person earning $1,000,000, and 99 people who earn $zero. GDP is $1 million, and GDP per capita is $10,000. Country B has a GDP of $500,000, all 100 people earns $5,000 which makes their GDP per capita only $5,000. So, which country is worse off? Which country’s citizens is worse off? It’s not perfect, but unfortunately GDP per capita is the best we have to compare countries and their well-being.

So, here are some interesting correlations. First, rich-world developed areas (North America, Europe in general, and the European Union) all have strong positive correlations. Second, very poor areas (Sub-Sahara Africa, North Africa, and the “Arab World”) that have moderate immigrant percentages but flat correlations. Third, Latin America and East Asia have slightly higher GDP per capita, yet no discernible or even negative correlations.

The World, as an aggregate, seems to show a positive correlations on par with rich world, developed nations.

These results leave me with more questions than answers (which is the fun part, I must admit). What is the direction of the rich world positive correlation? Is GDP per capita higher because of our efficient use of immigrants? Or, do we have more immigrants because of the higher GDP per capita? How would East Asia look if I teased out China and Japan? Is the loss of GDP per capita in Latin America and Africa due to their emigrations to the US and Europe? Are there institutions involved that makes immigrants in the Arab World less efficient, even though they are notorious for higher levels of migrant construction labor? What are some other factors that may keep lower per capita countries from experiencing positive correlations?

I’m curious to your thoughts. 

Posted 7 months ago

Comments

6 notes

world development, development, WDI, economics, economic growth, africa, europe, north america, asia,