3 ms·

I think this is quite similar to this analysis of the effects of the more recent supply chain issues on US inflation and the Phillips curve: https://bankundergr

by makomk 3y ago

I think this is quite similar to this analysis of the effects of the more recent supply chain issues on US inflation and the Phillips curve: https://bankunderground.co.uk/2023/07/05/did-supply-constraints-tilt-the-phillips-curve/ https://bankunderground.co.uk/2023/07/05/did-supply-constrai... There's a lot of technical details on how they measured this exactly, but the rough conclusion is that supply chain constraints steepen the Philips curve and cause monetary policy to have a much greater effect on inflation than it normally would, rather than having less effect as bank economists apparently wrongly thought in the 1970s. This probably shouldn't be a surprise - after all, if the oil or other basic things needed to increase production isn't there, there's no way for the expansion in production that would be needed to stop an increase in money supply from being inflationary to happen. Yet even now, there seems to be a widespread popular belief that because the cause of inflation is supply side, there's no reason for central banks to raise interest rates and they're just making things worse for no reason by doing so.

Gibbon1 3y ago
Sort of my take. Oil supplies increased exponentially till about 1970 and then that stopped right as the big cohort of post WWII children entered adulthood. I read a heterodox economist who argues that standard economists are wrong in that they believe that the energy contribution to GDP is a few percent. When he says it's closer to 100%. Which makes sense, if you assume unlike economists that fossil fuel energy is a primary non-substitutable supply constrained resource. Belief of mine, the transition to solar and wind is resulting in renewed growth in energy supplies. At the same time population growth is stalling.
- detourdog 3y ago
  I decided to sell stock to install a large solar array. My theory is that I'm investing in securities to smooth out my retirement. Investing in the solar panels divorces me from wild swings in electrical pricing as well as providing my daily electrical needs. I reasoned that securities that are based on societal organizations are harder to predict than my energy needs or the sunshine. I think there is also an efficiency in developing the electricity as close to the need as possible.
  - Gibbon1 3y ago
    That's hedge for sure in that you're minimizing your downside risks. A friend has a large array, a battery, an electric car and no gas appliances. During the big wind events where PG&E cut off everyone's power didn't effect him at all. He has a mortgage and a water bill basically. He said their is this feeling of being free from all that.
- skybrian 3y ago
  Thinking of it in binary terms (substitutable or not) doesn't make a lot of sense to me. It seems pretty clear that some energy substitutions are easier than others, and we've gotten better at the easier ones.

by makomk 3y ago

Gibbon1 3y ago

Sort of my take. Oil supplies increased exponentially till about 1970 and then that stopped right as the big cohort of post WWII children entered adulthood. I read a heterodox economist who argues that standard economists are wrong in that they believe that the energy contribution to GDP is a few percent. When he says it's closer to 100%. Which makes sense, if you assume unlike economists that fossil fuel energy is a primary non-substitutable supply constrained resource. Belief of mine, the transition to solar and wind is resulting in renewed growth in energy supplies. At the same time population growth is stalling.

detourdog 3y ago
I decided to sell stock to install a large solar array. My theory is that I'm investing in securities to smooth out my retirement. Investing in the solar panels divorces me from wild swings in electrical pricing as well as providing my daily electrical needs. I reasoned that securities that are based on societal organizations are harder to predict than my energy needs or the sunshine. I think there is also an efficiency in developing the electricity as close to the need as possible.
- Gibbon1 3y ago
  That's hedge for sure in that you're minimizing your downside risks. A friend has a large array, a battery, an electric car and no gas appliances. During the big wind events where PG&E cut off everyone's power didn't effect him at all. He has a mortgage and a water bill basically. He said their is this feeling of being free from all that.
skybrian 3y ago
Thinking of it in binary terms (substitutable or not) doesn't make a lot of sense to me. It seems pretty clear that some energy substitutions are easier than others, and we've gotten better at the easier ones.