A few articles I’m reading 1/10/2014

That’s the first time I’ve typed “2014” all year. Wow.

Here are some articles I’m reading this morning:

1. The news seems to be all over debates on the general shift toward the right in Europe (a feature in a recent issue of the Economist). Specifically, discussion of the tightening of immigration/migration rules are starting to heat up. One analyst has developed models to determine exactly what the long term impact of reduced migration in the UK would be on the overall economy. The results aren’t good.

Our results show that a significant reduction in net migration has strong negative effects on the economy. First, by 2060 in the low migration scenario, aggregate GDP decreases by 11% and GDP per person by 2.7% compared to the baseline scenario (Figure 1). Second, this policy has a significant negative impact on public finances, owing to the shift in the demographic structure after the shock. The total level of government spending expressed as a share of GDP increases by 1.4 percentage points by 2060. This effect requires an increase in the effective labour income tax rate for the government to balance its budget. By 2060 the required increase is 2.2 percentage points. Third, the effect of the higher labour income tax rate is felt at the household level, with average households’ net income declining because of the higher income tax despite the initial increase in gross wages due to lower labour supply. By 2060, the net wage is 3.3% lower in the low migration scenario.

Humans are more mobile in the 21st century than they’ve ever been in human history. Say what one will about globalization, but the reality is that it’s already happened. Cutting the cord on migration would see declines in income in both the developed (through loss of productivity) and developing worlds (through loss of remittances).

2. Niger and France have yet to come to an agreement to the terms of a contract to mine uranium by state owned multi-national giant Areva. Niger would like to increase their share from the current 5% to 12%. Areva is worried about profitability. Not knowing Areva’s operating costs and Niger’s track record of transforming mining revenues into public services, I’m not sure what to think.

France derives 75% of its energy from nuclear power and Areva gets 37% of its uranium from Niger. On top of this, Niger has few other options with which to generate money. The two parties have a lot at stake.

3. Krugman rails on the 50th anniversary of Lyndon Johnson’s War on Poverty. On the surface, it looks to be a bitter failure. Inequality is at an all time high and wages have been slipping for the bottom 25% for decades. Still, Krugman ends on a positive note. The pain we feel now could help spur a new progressive movement. I think he’s probably right. Amid the political circus, We’ve been quietly expanding social programs like Medicaid and it’s going to work out well for us. It’s really easy to be pessimisitic about American politics, but there’s potential light at the end of the tunnel, assuming that progressive can finally get their story straight and the right continues to shoot itself in the face.

4. Groups in Zimbabwe are gearing up to fight over who will succeed the old bastard. I think he’s already dead and we’re actually seeing a robot. I’m not confident that whoever succeeds him will be much better. It’s possible that his poison has been spread so thick, that Zimbabwe, once a rising economic star, will continue to be the inexcusable poster child for African political failure.

At the core of the long running struggle for supremacy in ZANU-PF are two factional groups led by Mujuru and Mnangagwa. Mujuru’s side, sometimes referred to as ‘the moderates’, is a purportedly pro-business and centrist bloc that is seen as attempting to push ZANU-PF politics to the centre and improve relations with the international community.

Mnangagwa’s camp, the so-called ‘hard-liners’ or ‘old guard’, is mostly made up of an elite group believed to have dominated Zimbabwe’s political scene since the 1980s; many assume that this faction would seek to continue Mugabe-style politics, anti-western rhetoric and policies as well as continued authoritarianism.

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About Pete Larson

Assistant Professor of Epidemiology at the Nagasaki University Institute for Tropical Medicine

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