Day: September 1, 2022

The Inflation Factor: How Rising Food and Energy Prices Impact the Economy

This post is by Dorothy Neufeld from Visual Capitalist

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The Inflation Factor: How Rising Food and Energy Prices Impact the Economy

How Rising Food and Energy Prices Impact the Economy

This was originally posted on Elements. Sign up to the free mailing list to get beautiful visualizations on natural resource megatrends in your email every week.

Since Russia’s invasion of Ukraine, the effects of energy supply disruptions are cascading across everything from food prices to electricity to consumer sentiment.

In response to soaring prices, many OECD countries are tapping into their strategic petroleum reserves. In fact, since March, the U.S. has sold a record one million barrels of oil per day from these reserves. This, among other factors, has led gasoline prices to fall more recently—yet deficits could follow into 2023, causing prices to increase.

With data from the World Bank, the above infographic charts energy shocks over the last half century and what this means for the global economy looking ahead.

Energy Price Shocks Since 1979

How does today’s energy price shock compare to previous spikes in real terms?

U.S.$/bbl EquivalentCrude OilNatural GasCoal

*2022 forecast

As the above table shows, the annual price of crude oil is forecasted to average $93 per barrel equivalent in 2022⁠. By comparison, during the 2008 and 1979 price shocks, crude oil averaged $127 and $119 per barrel, respectively.

What distinguishes the 2022 energy spike is that prices have soared across all fuels. Where price shocks were (Read more...)

Very smart post on causal inference

This is Joseph.

Andrew Gelman has a very nice piece on the challenges of causal inference over on his blog, looking at the discussion between Noah Smith and Bret Devereaux. As a conflict avoider of heroic stature, I don't like people I follow fighting but, in this case, it is bringing up some good points. 

But going back to just understanding patterns is also a very important step in epidemiology as well and there is a new movement towards trying to do more rigorous descriptive work. For example, this paper by Catherine R Lesko, Matthew P Fox, and Jessie K Edwards. I have some disagreements with the authors but it is a fantastic piece to get epidemiology thinking clearly about these issues. 

Research Twice, Build Once: How to Know Your Users as You Grow

Far too many products still fail because there’s simply no demand for them. How does that happen? Or, how do so many startups launch entire businesses without realizing users didn’t need their products?  By overlooking user research.  Every tech company has to build and ship new products to continue growing. And, whether there are 10... Read More

The post Research Twice, Build Once: How to Know Your Users as You Grow appeared first on Future.

Keeping The Main Thing The Main Thing

This post is by Howard Lindzon from Howard Lindzon

Good morning…

I am on my way to Muskoka for a few days.

Last night I had dinner with my mom and sister and got to see my twin great niece and nephew for a bit which was great.

This morning while I was doing my workout, I listened to Patrick’s interview with Sequoia’s Ravi Gupta who is a great leader and operator who talked about the concept of ‘keeping the main thing the main thing‘. I doubt I would have appr3ciated the concept in my 20’s and 30’s but I do now in my mid 50’s.

I think it is a concept and subject that many would benefit exploring and at least listening to how it is deconstructed by Ravi.

Here is a link and I hope you enjoy.

Have a great day.

Not doing things is a nonrival good (and while we’re on the subject, can you have a nonrival good with a monopsony?)

As mentioned before, Matt Levine has become on of the essential writers on the business and finance beat and I strongly recommend that everybody sign up for Levine's free Money Stuff newsletter mentioned at the bottom of the post.

Here's a choice bit from the August 30th newsletter. 

The most interesting field of economics might be the economics of not doing things. The main way that people make money, in the world, is by doing things that other people want: drilling oil, brewing coffee, maintaining social media sites, writing newsletters. But there are a few lines of business where you can get paid for not doing things that you’d otherwise do. Blackmail, for instance, is a classic: “I will go around distributing these compromising photos of you, unless you pay me money, in which case I will do nothing.” Coasean bargaining: “I will build a smelly polluting factory on my land next to yours, unless you pay me money not to, in which case I will leave it undeveloped.” Demand response in electric grids: “I will turn my lights on and use electricity, unless you pay me not to, in which case I will use less electricity.” And, in the modern world, all sorts of environmental credit schemes: “I will chop down these trees, drill this oil, etc., unless you pay me not to, in which case I won’t do anything at all.”

There are so many ways in which the economics here are unintuitive. Consider the (Read more...)

Don’t blame the mouse

This post is by Seth Godin from Seth's Blog

If you leave your cheese out and the mouse eats it, the mouse is simply being a mouse.

While it might be nice if the mouse didn’t wreck your dinner, that’s his job.

Often, we show up with our cheese and then become indignant when the mouse does what mice do.

“Oh, you’re a mouse.”

That makes it a lot easier to navigate.