How to End Hunger Hilal Elver and Jomo Kwame Sundaram

Last September, world leaders made a commitment to end hunger by 2030, as part of the United Nations Sustainable Development Goals (SDGs). It sounds like a massive undertaking. In fact, the world already produces enough food to feed everyone. So why does the problem persist? Poverty and hunger are intimately connected, which is why the SDGs target elimination of both. For someone living at the World Bank’s poverty line of $1.90 per day, food would account for some 50-70% of income. The Bank estimates that almost four-fifths of the world’s poor live in rural areas, though those areas account for…

Trend Reversal in Oil Markets? C.P. Chandrasekhar

In early June 2016, the price of US West Texas Intermediate (WTI) crude oil crossed the $50-a-barrel mark for the first time since July the previous year, having risen from lows of around $25 a barrel in February.  A gradual reversal of the previous steep decline had begun. This had set off speculation that the world economy is entering a new phase of the oil-cycle with prices expected to touch upward of $60-a-barrel by the end of the year. Interestingly, there were two different interpretations of the factors underlying this turn. Some argued that this was evidence of a demand…

A Different Oil Shock C.P. Chandrasekhar

In a curious shift in perception, low and falling crude oil prices are increasingly being viewed as a disadvantage rather than a benefit to the global economy. The spot price of Brent crude has fallen from just above $100 a barrel at the beginning of September 2014 to around $27 a barrel in mid-January 2016—a close to 75 per cent collapse over a 17-month period. The decline is giving rise to jitters on what it would do to an already sluggish global economy. That marks a shift, since initially the downturn in oil prices, which had been fluctuating in the…

Why the Fixed External Reference Price of 1986-88 should be Challenged Jacques Berthelot

The author argues that there is no reason to differentiate between the administered prices paid to farmers in developing countries and the so-called market prices paid in developed countries as the latter, being heavily subsidized, are not actual market prices. External_Reference_Price (Download the full text in PDF format)

Commodity Supercycle: A “myth” explained Manuel Riesco

In the Financial Times of 31 August 2015, a piece entitled “Why the commodities super cycle was a myth” concludes that “falling prices show the world is not running out of resources”. It is rather the case that falling prices show that speculative capital is flowing out of commodities, as advanced economies start to recover – in however sputtering a manner – from the secular crisis that began in 2000. In recent weeks, the copper price has fallen under 2.3 dollars per pound, exactly half its historical maximum reached at the beginning of 2011. Pitifully, if the world economy repeats…

Why has this Recession not Produced a Price Deflation? Prabhat Patnaik

A striking difference between the Great Depression of the 1930s and the current world recession is that unlike then there has been no absolute price-fall this time, which is significant because such a price deflation makes recovery difficult. There are two reasons why this is so. First, a price deflation raises the real interest rate above the nominal interest rate, i.e. the rate in money terms. If the latter is 2 percent and prices are falling at 3 percent, then the real interest rate is 5 percent. Since recovery from a recession requires a revival of investment, which depends on…

The Persistent Power of Finance C.P. Chandrasekhar

In a move that went contrary to what is expected of regulators, the Securities and Exchange Commission of the US approved in mid-December a controversial JP Morgan-created exchange-traded fund (ETF) backed by physical supplies of copper. The fund will use investor money to buy and hold copper, presumably to earn a profit when prices rise. According to a NASDAQ analysis the investment vehicle will register 6.18 million shares backed by 61,800 metric tonnes of copper in physical form stored in warehouses approved by the London Metal Exchange or located in the Netherlands, Singapore, South Korea, China and the US, and…

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