Sanctions thus far have only applied to some financial institutions and military exports. However, if they were to target the energy sector which is Russia's largest export by far it could cripple their economy. Yet, the problem remains how consumers in America would face financial problems with higher gas and Europe losing their main source of energy -- posing the question of tradeoffs.
17 Matching Annotations
- Sep 2023
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docs.google.com docs.google.com
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While sanctions will likely not deter Russia from not attacking Ukraine, the purpose of these sanctions is to attack Russian instituions in the long-term. By hurting Russian financial insitutions and consumers, their economy will fall even further behind than their Western counterparts relatively.
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Free international markets allowed Russia to export their most valuable commodity and fuel their potliical/military machine. Moreover, consumers around the world can obtain cheaper energy and provide support to their governments for helping their wallets. Ultimately, international free markets facilitate cheaper goods, empower governmental services, and push the economy.
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www.ianfeinhandler.com www.ianfeinhandler.com
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The conventional wisdom about globalization is that it created a thriving internationalmarketplace, allowing manufacturers to build flexible supply chains by substituting one supplieror component for another as needed. Adam Smith’s The Wealth of Nations became the wealth ofthe world as businesses took advantage of a globalized division of labor. Specialization producedgreater efficiency, which in turn led to growth.But globalization also created a complex system of interdependence. Companies embracedglobal supply chains, giving rise to a tangled web of production networks that wove the worldeconomy together. The components of a given product could now be made in dozens ofcountries. This drive toward specialization sometimes made substitution difficult, especially forunusual skills or products. And as production went global, countries also became moreinterdependent, because no country could possibly control all the goods and components itseconomy needed. National economies were subsumed into a vast global network of suppliers.The pandemic of the disease caused by the new coronavirus, COVID-19, is exposing the fragilityof this globalized system. Some economic sectors—particularly those with a high degree ofredundancy and in which production is spread across multiple countries—could weather thecrisis relatively well. Others could be pushed close to collapse if the pandemic prevents a singlesupplier in a single country from producing a critical and widely used component. For example,car manufacturers across western Europe worry about shortages of small electronics because asingle manufacturer, MTA Advanced Automotive Solutions, has been forced to suspendproduction at one of its plants in Italy.In an earlier age, manufacturers might have built up stockpiles of supplies to protect themselvesin a moment like this. But in the age of globalization, many businesses subscribe to Apple CEOTim Cook’s famous dictum that inventory is “fundamentally evil.” Instead of paying towarehouse the parts that they need to manufacture a given product, these companies rely on“just-in-time” supply chains that function as the name suggests. But in the midst of a globalpandemic, just-in-time can easily become too late. Partly as a result of supply chain problems,global production of laptops fell by as much as 50 percent in February, and production ofsmartphones could fall by 12 percent this coming quarter. Both products are built withcomponents produced by specialized Asian manufacturers.
With trade, countries can substitute items in their own supply chains to make production cheaper and more efficient. From this, they can reduce inventory while being absorbed by the global network of suppliers and thus develop the economy and hence development at a much faster pace than they were pre-globalisation.
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But these efforts alsoreduced the amount of unused resources—what economists refer to as “slack”—in the globaleconomy as a whole. In normal times, firms often see slack as a measure of idle, or evensquandered, productive capacity. But too little slack makes the broader system brittle in times ofcrisis, eliminating critical fail-safes.
Interestingly, the removal of slack in global resource usage/trade has resulted in a lack of fail-safe measures. Globalisation has given people greater wealth at the risk of economic crises.
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- Aug 2023
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www.core-econ.org www.core-econ.org
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What stops consumers from protesting against cheaper services in exchange for environemntally positive actions? Would people not choose to save costs when they believe ' just one person won't make a difference'?
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https://www.vox.com/energy-and-environment/2017/12/1/16718844/green-consumers-climate-change
With this source, where it's stated "It’s not that the pro-environmental behaviors chosen by wealthy, eco-conscious people don’t reduce energy use and carbon footprints. They do. Just ... not very much. And what effect they have is swamped by the much larger effects of wealth, age, and status." It's extremely clear that even environemtnally concious people in rich countries cannot fully help the environment becasue of their own lifestyles and national systems, proving this argument's point.
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However, since we can only generate wind power when the wind blows and solar power when the sun shines, renewable energy generation can be less reliable than fossil fuel generation.
Even though some alternative technologies may be cheaper and produce more effectively, external factors may hinder their adoption
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Technological breakthroughs allow the substitution of processes or materials that would have previously been used. Oftentimes, these replace processes that would normally have been worse for the environment. Moreover, these fix consumer dissatisfaction with the environemnt at a cheaper economic rate too.
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docs.google.com docs.google.com
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https://www.nber.org/digest/jun01/why-tropical-countries-are-underdeveloped I thought this was extremely interesting as it illustrated many of the ideas brought up in this piece. It actually argued against this piece, stating those factors were instead the reason behind tropical economic lag.
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Singapore's economic development comes from its institutional factors. The government's leadership wanting to push the country towards a free market and investing in long-term social programs for example makes them fare better than neighbouring countries.
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Last Idea (also wrong), Ignorance hypothesis: Ignorance from leaders cause wrong economic decisions. Yet, this is wrong because it assumes all knowledgable leaders will eventually rule well but this is not what actually happens. Knowledgable political leaders can and do manipulate institutions to their own benefit.
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Second idea (what we really should look at), Culture Hypothesis:
Institutional decisions CHANGE culture, not the other way around and thereby changing economic trajectories.
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First Idea, Geography Hypothesis: (WRONG) It's thought that geography is an explanation for poverty. Tropical areas are thought to be poorer because soil is harder to work and diseases are rampant in addition to the 'lazy' demeanor of the people.
Furthermore, species that were spread during continental drift influenced future domestication and thus economic growth.
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Page 5 "temperate climates", Is it not possible that tropical climates makes thinking and working harder? Lee Kuan Yew did state that Singapore could only be developed (which was mentioned earlier in the paragraph) through the invention of A.C
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documents1.worldbank.org documents1.worldbank.org
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Why do Austria and Japan specifically have a much higher percentage of freeloaders?
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What stops private/cooporate interests from using this research to manipulate people in the poverty trap?
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