The Carbon Conundrum

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Last week, Canada announced that it had taken its first steps towards joining a small and exclusive group of nations with a national carbon tax. Prime Minister Justin Trudeau called upon the country’s provinces to individually adopt either a carbon tax or a cap-and-trade framework by 2022, or have Ottawa impose a tax by that date. But why should government interfere with the free market in order to reduce carbon consumption? Does the market not always result in an efficient amount of carbon being bought and sold? Indeed, economics has often been the seat of contention, not in the least because of its impact on politics (and often, the impact of ideology on fiscal research). Between reforming the tax code, tackling our healthcare epidemic or determining how to best trade with foreign nations, today’s pre-eminent thinkers have much to debate over. However, a surprisingly large consensus exists on the need for government intervention in curbing carbon consumption. Simply put, carbon KEEP READING >>

Argentina Needs to Fix Its Debt Problem

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Argentine President Mauricio Macri has a tough year ahead of him, marked by a weak economic outlook and a strong political opposition. Economically, his liberal economic plan seeks improve macroeconomic indicators by addressing external and fiscal imbalances and reducing inflation. In his first month in office, President Macri eliminated or reduced taxes on commodity exports and abolished exchange controls. The most popular measure he has enacted thus far has been the lifting of the controversial “cepo cambiario,” or ban on dollar purchases. This move gave him the political capital to later cut electricity subsidies in order to reduce Argentina’s high fiscal deficit, raising the price of electricity. Cutting the subsidies also increased the amount of money that goes to the province of Buenos Aires through the system of revenue sharing, to the great displeasure of other provinces. The first months of 2016 in Argentina were marked by a sharp peso devaluation that boosted an already high KEEP READING >>

A Bad Year For Cartels

Photo Credit: Sang Ra

If you have happened to pass by a gas station recently, it is probably evident that OPEC is not having a good year— United States gas prices now hover around $1.86 on average, down from $2.05 a year ago. Though the shale revolution in the United States has significantly boosted the global supply of oil, OPEC has refrained from cutting production.  While officials in many smaller countries such as Algeria have strongly criticized this policy, Saudi Arabia has remained committed to keeping prices low in order to maintain its market share. Shale has provided the oil industry with a more elastic supply; an increase in prices could result in a relatively rapid reversal of the current slowdown of American shale.  Though OPEC bears the brunt of the advancements in the energy industry, it is not alone in its troubles— broader technological progress and political change have pressured a range of other cartels around the world this year. Although a maple syrup cartel sounds like the subject KEEP READING >>

Marijuana In Mexico

On November 4th, the Mexican Supreme Court ruled in favor of four anti-crime activists from a cannabis club called Mexican Society for Responsible and Tolerant Personal Use, or SMART. It declared unconstitutional the country’s ban on the production, possession, and recreational consumption of marijuana. Though the court’s decision currently only applies to the plaintiff, it has lain the groundwork for future legal actions that could ultimately lead to the legalization of recreational and medicinal marijuana nationwide. It represents a direct challenge to the nation’s strict substance abuse laws and has significant implications for the debate on the efficacy of current policy on narcotics in the region. Shifting drug policy in Mexico as a result of this controversial ruling will impact a drug war that has ravaged multiple regions of the country since the early 2000s and has claimed over 83,000 lives.  In order to understand the effects of legalization, a closer look at the business of KEEP READING >>

Bicycling In Beijing

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Beijing’s streets are littered with the past. Hidden within the shadows, between intermittent streetlights, or laid bare on the pyres of public refuse, they shrink from the high-beam gaze of the lumbering automobiles struggling through narrow lanes. They are the remnants of a previous age: the Kingdom of the Bicycle. For a long time, bicycles have been the main method of transportation in China’s capital city. With ring roads built around the Forbidden City, bicycles were an easy way to navigate. The introduction of cars made the use of bicycles obsolete. People discovered that with a car, they could get to their destinations quicker than ever before. But thanks to the efforts of a growing community of cycling enthusiasts, new flocks of bikes are taking to the streets and public perceptions are shifting. People are beginning to ride bicycles more frequently, but have yet to revert back to the pre-automobile era of riding bicycles wherever an individual needs to go. So how do bicycles KEEP READING >>

Greece’s Greatest Gamble

Photo by Sang B. Ra for the Columbia Economics Review

What began as a growing concern coming off of the financial crisis of 2007 - 2008 has snowballed into a train wreck with global implications. The elephant in the room? Greece’s financial solvency. Though Greece had enjoyed spectacular growth for the two and a half decades following its decision to join the European Communities, a combination of poorly timed infrastructure projects and underreporting of government deficits has culminated in its inability to pay back its creditors. During the fallout of the Great Recession, Greece’s financial situation continued to deteriorate. From the fall of 2009 to the summer of 2011, Greece’s credit rating tumbled from A to C by all major credit rating agencies. The Athens Stock Exchange hit its lowest point since the 1990s. With Greek/German 10-year debt spreads tripling in less than a year, NSA intelligence reports released by WikiLeaks presented evidence of secret talks to plan the exit of Greece from the Eurozone in 2012. Though the KEEP READING >>

The Left Alternative

Photo by Sang B. Ra for the Columbia Economics Review

The financial crisis of 2007 - 2008 altered the global political economy in ways that continue to be realized. No part of the world that was left untouched – from villages in rural China to the heart of London. The crisis was particularly profound in Europe, where the structure of the European Union and the interdependency of its member nations facilitated a dramatic alternation of daily economic life. In Spain, youth unemployment reached over 55 percent, as a direct result of falling global demand. Even today, there are four EU member countries with youth unemployment exceeding 40 percent: Greece (53.7), Spain (49.2), Italy (44.2) and Croatia (43.1). The average net worth of households across the European Union fell dramatically since the crisis. In Ireland, net worth fell to € 18747 per household, in Greece, it became €16909 per household and, in Spain, it is now €12780. Across Europe, much of the frustration of the crisis manifested itself in a distinct rightward shift of KEEP READING >>

The Appeal of Universal Basic Income

Photo by Sang B. Ra for the Columbia Economics Review

Everyone should get paid. Yes, even people who don’t work and even those who don’t want to work. Such is the principle behind Universal Basic Income (UBI), an idea that seems to contradict most of the Western World’s conceptions of labor, merit and effort. Yet, the leftist party “Podemos” in Spain and a growing majority in the European left would disagree. Could Universal Income be the answer for a recession and austerity stricken Europe? The ethos behind universal basic income is not new. Growing attention to poverty and wealth inequalities in high income countries has prompted debates around minimum wage in the US and welfare mechanism in Europe. UBI’s innovation lies in the fact that it erases the government’s restriction on welfare recipients, effectively eliminating one of the most contested requirements of unemployment welfare: that beneficiaries need to continue actively looking for jobs or even accept jobs they do not want.   The main benefit of the UBI is its simplicity. KEEP READING >>

Let Computers See the World

“I want to do more.” This was a passionate and determined statement from Bofei He, the founder and CEO of Deep Glint. It is a computer vision startup in China that seeks to apply 3D computer vision technology to artificial intelligence and pattern recognition for industries such as surveillance and traffic control. While Deep Glint was recently founded in 2013, Bofei first envisioned starting his own company as early as almost ten years ago. In an interview with Global China Connection last year, Bofei explained that he encountered many possible opportunities in the past to join startups. Yet, he decided not to join those because he wanted to do something much more meaningful. He said, “I am committed to not merely starting an influential company, but founding a company that would leave a lasting impact on human history.” Story of Serendipity Bofei spent the early part of his career serving as the General Manager of two multinational corporations, Intuit and Blackhawk Network. In KEEP READING >>

Beeconomics: The Economics of Colony Collapse Disorder

While the sight of fuzzy, yellow winged critters may strike fear into the hearts of the sting-adverse, bees are surprisingly essential to life as we know it. Without bees to take on the herculean task of pollinating the plants of this world, it is estimated that mankind would only survive four years before going extinct. Humanity’s oft-forgotten dependence on bees makes Colony Collapse Disorder (CCD), an increasingly prevalent phenomenon in which bee colonies abruptly die without a definite traceable cause, quite an ominous occurrence. While environmentalists have been preoccupied with the mysterious mass deaths of our trusty pollinators for some time now, bees rarely enter discussions in economic circles. The collapse of bee colonies is, however, an important economic problem as the world’s capacity to respond to this issue and the impacts on agricultural market systems are all fundamentally economic issues. The economic value of bees is derived from their labor and product KEEP READING >>