Alejandro Nadal
Lightning in the sky does not follow a straight line. The irregular patterns in a cauliflower or the capricious forms of a tree’s branch are a challenge to the clean geometric figures we learn in school. Neither the straight lines, nor the smooth curves of that geometry exist in nature. But after the wonderful work of Benoit Mandelbrot it is now possible to get closer to a theory of the manifold wrinkles and rough surfaces that are the stuff of our universe. And our economies.
Ten days ago this great mathematician, the creator of fractal geometry and other wonders closely related to chaos theory, passed away.
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Adil Najam
The excitement that had marked the creation of the International Renewable Energy Agency (IRENA) in early 2009 – to act “as the global voice for renewable energies” – dissipated fast in the last year and a half. Indeed, for those few who followed what was happening at the agency, feelings of crisis and panic set in fairly early and in recent weeks had turned into a distinct sense of foreboding and desperation. One hopes that this is finally about to change as new excitement has been injected into IRENA after the resignation of its beleaguered founding Director General – Helene Pelosse from France – and the appointment of Kenyan development economist and seasoned UN official Adnan Amin as her replacement.
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Miquel Muñoz, Guest Blogger
In the last weeks, two hurricanes have threatened Cancún. Hurricane Paula veered east, hurricane Richard southwest, both sparing the resort city and venue for the upcoming UN Climate Change Conference (COP 16). If this post was about the last COP in Copenhagen, the headlines would be unmistakable: “Hurricane Threatens Climate Negotiations.” For Cancún, conversely, a better analogy can be found in Copenhagen’s winter weather: grey and overcast. This would fittingly describe the level of expectations for Cancún.
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Mark Blyth
The Triple Crisis Blog is pleased to welcome Mark Blyth as a regular contributor.
In my first triple crisis piece I wrote about John Quiggin’s new book thesis concerning Zombie Economic ideas. Lead zombie of the moment is the idea of fiscal austerity as the way out of the crisis, despite oodles of evidence to the contrary. In short, we need to cut budgets to restore fiscal sanity, and we know that this is the way forward since small open economies in the 1980s (Ireland, Belgium, Denmark) that cut their budgets still grew. The economic (ir)rationale for this has been pointed out by Krugman, Stiglitz, and others. But for me the most interesting, and most tragic part of this story, are the distributional consequences of these policies, and the politics that they engender.
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Eric Ogunleye
The Triple Crisis Blog is pleased to welcome Eric Ogunleye, a Research Fellow at the African Center for Economic Transformation in Accra, Ghana, as a regular blogger.
The negative effects of the recent global financial crisis on African countries are still very fresh in our minds. Global commodity demand fell precipitously, protectionist and restrictive trade policies soared, foreign investment shrank and foreign aid contracted, threatening the growth and poverty reduction achieved in the recent past. For instance, between 2007 and 2009, real GDP growth plummeted in percentage points from 20.3 to 0.7 (Angola), 4.8 to -3.7 (Botswana) and 6.2 to -3.7 (Madagascar). During the same period, fiscal balance excluding grants worsened from +11.5 to -4.8 (Angola), +0.8 to -4.9 (South Africa), +5.6 to -10.6 (Botswana) and +3.6 to -15.4 (Liberia). Increasing unemployment remains a major risk; South Africa lost 484,000 jobs in the third quarter of 2009 alone. The Nigerian stock exchange lost almost 70% of its value.
These were all the result of vulnerability to foreign financial resources. To reverse these negative trends and re-launch the continent on the path of sustainable recovery, deepening domestic revenue mobilization is imperative.
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Kevin P. Gallagher, Financial Times, October 20, 2010
Triple Crisis blogger Kevin P. Gallagher was invited to submit an article for the Financial Times as part of a three-way debate on the use of capital controls. His piece begins below, and you can read the full article at Financial Times, as well as the other positions written by Guillermo Calvo and Gerard Lyons. For more on the issue from Triple Crisis, see Ilene Grabel’s recent post, and other contributions on capital controls. Read more on Gallagher’s work on issue for the Global Development and Environment Institute.
Emerging markets have their hands full trying to stem currency appreciation and asset bubbles due to their higher interest rates and formidable economic recoveries relative to the west. The situation will only worsen as world leaders continue to fail to reform global finance and the US moves to another round of quantitative easing.
In times like this, capital controls have regained their legitimacy as a tool emerging markets can resort to.
One can make the argument that many emerging markets eventually need to let their currencies appreciate, in real terms. But flows of speculative capital that stop and start suddenly are a destabilizing way to that end….
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Sophia Murphy, Guest Blogger
The 36th meeting of the FAO’s Committee on Food Security (CFS) concluded in archetypal UN fashion: one and a half hours of apparently aimless milling about followed by a call to order, a ten minute exchange during which it becomes clear that the milling about was actually about last – very last – minute negotiations, and, finally, adoption of the report by acclamation. So ended the first meeting of a revamped piece of the UN system — a small but fascinating piece.
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James K. Boyce
Security – protection from natural and accidental disasters as well as from deliberate efforts to inflict harm – is a basic human need. To a large extent it is a public good: when provided to one it is provided to all. Security is one reason for the existence of governments.
Those who want to play the role of daddy in a daddy state peddle the illusion that security can be entrusted to government alone. But real security requires more than government agencies. On the economic front, it requires infrastructure built for resilience. On the political front, it requires citizens to shoulder responsibilities. And on the moral front, it requires respect for others.
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