Put as a slogan, it sounds like this: the sustainability will be comprehensive or it will not be.
My reasoning about sustainability is simple: any micro-specific meaning and scope of this notion is misleading, cause essentially wrong as arbitrary and useless. Sustainability must be comprehensive as much possible: for example, the capital which enters the sustainable trajectory of well-being/consumption that has to be kept constant over time, must include any type of capital. Physical reproducible capital used as mean of production (like structures and equipment), natural reproducible and irreproducible capital, human, social, institutional capital and so on.
I place here some brief notes on the issue of Sustainability and Public Debt.
I will return on the issue about the notion of comprehensive sustainability in a following post.
For now I start this brief noting that the dynamics of public debt is marked by an inherent instability (represented by the flow of interest payments on a given stock of debt), which may make it unsustainable. Here unsustainability means that a permanently raising debt charges a heavy burden on future generations because taxes will have to rise in the future to pay for it. Unless – as we shall see later – certain conditions were not met. Continue reading →
After an experience lasting more of seven years, the American leadership of the football club AS Roma (Roma for short) has produced very poor results in terms of sports achievements. A failure of both governance and management. The only significant achievement has been the Europe Champions League semi-final, reached last season and lost against Liverpool. But the club has not won any title in these seven years.
A football club is a sport organization and an entertainment company, operating in the rich market of the live sport events with high audiences. Tickets proceeds and TV rights are among the main sources of revenue of this performing companies.
From an economic point of view, the output of such a firm is supposed to be the team’s live performance. Titles won are an objective parameter to evaluate this performance. Subjective indirect parameter is the people appreciation, in turn measured by stadium tickets and TV subscriptions.
Mr. Pallotta, owner and president of the company As Roma, of course bears the most Continue reading →
The current irresistible wave of nationalism/populism which took place in Europe and USA has of course an economic dimension, among several other distinctive factors (cultural, historical, geographic, etc.).
Let us call “globalization” this economic dimension. Globalization itself has a long history, as it is well known, but here I refer to the developments occurred in the last 30 years – even if a narrative in terms of courses and re-courses could be applied with some justification to the topic.
I propose here that the AD-AS model, and its elementary geometry consisting of two curves, can be employed to shed some light on the basics of this economic dimension. It is sufficient to add to this popular framework another curve expressing the world supply of tradeable goods & services (WAS) at given price levels and exchange rates. In this integrated framework, the short run aggregate supply curve (SAS) refers to the domestic production (of tradeable goods) of a given country, and the short run aggregate demand curve (SAD) refers to the country expenditure in both domestic and foreign tradeable goods. The long run aggregate supply (LAS) is vertical at the potential level of domestic output. The WAS curve is horizontal because I suppose that foreign producers are ready to offer whatever amount they can at the current equalized world price (I assume the law of one price: equivalent goods sell for equivalent prices on international markets). Continue reading →
The 2018 Spring semester is going to start at the Roma3 University, and thus a new beginning for the courses of Political Economy and Economic Policy is expected.
In the meanwhile, I like to post some remarks regarding two fundamental economic issues: 1) supply and demand; 2) market power.
1 – Consider this sentence:
«Teach a parrot the terms supply and demand and you’ve got an economist».
It may seems a malicious caricature of economists, but his author, Thomas Carlyle, is not completely wrong. Simply, he doesn’t understand the usefulness of a conceptual framework like that of supply & demand (S&D). Continue reading →
The dissatisfaction with Macroeconomics is a bit like that with philosophy or modern novel or string theory: a recurrent topic, a constantly revived affliction. As such, it deals with feelings.
The question is: it is also about facts?
My answer is: it depends. It depends from the side you look at the question.
On a purely theoretic ground, recent facts as the financial crisis and the subsequent Global Macroeconomic Recession that sorely tried mainstream explanations and models didn’t ignite a noteworthy reflection and least of all any significant change.
The policy field is intrinsically more pragmatic than the academic one – ie, models built for policy and forecasting purposes reflect cum grano salis a given dominant paradigm with its usual theoretic purity. Continue reading →
Some people are optimist about the current wave of technological change, other pessimists. The truth is that there is a lot of uncertainty about the prospective effects of this change. The current wave of technological change is mainly AI, artificial intelligence, and its spectrum of enhanced capabilities, particularly those based on machine learning. The optimists mainly belong to the fields of managers, technologists and, to a lesser extent, physicists. For example, Stephen Hawking, talking recently at the Web Summit Technology Conference in Lisbon, claimed that “success in creating effective AI, could be the biggest event in the history of our civilization. Or the worst. We just don’t know. So we cannot know if we will be infinitely helped by AI, or ignored by it and side-lined, or conceivably destroyed by it”. The “fact” we certainly know is that systems using AI can emulate and in theory exceed human intelligence, matching or surpassing human level performance in more and more domains. Even if it is largely recognized the potential of AI to help undo damage done to the natural world, or eradicate poverty and disease, with every aspect of society being transformed, the outcome is not granted. “Unless – in the words of Hawking – we learn how to prepare for, and avoid, the potential risks”. In a certain sense, economists are among the pessimists about the virtues of AI and robotics. Continue reading →