Saturday, May 29, 2004
While waiting for a shuttle to Narita airport this morning, I read The Japan Times (sorry, look for the links yourself, I am blogging from an internet cafe -- got limited time). A report says that the record high US oil prices have something to do with mergers of oil giants. The report cites a rencent study by US General Accounting Office (GAO). Among all, it says that the mergers of Exxon Corp. with Mobil Corp. plus 5 other oil companies since 1990 lifted US gasoline prices an average of 1 or 2 cents a gallon (another big merger was of Texaco Inc. and Shell Oil and Saudi Refining Co.). But, FTC (Federal Trade Commissioun -- FTC) called the GAO study flawed, because "it did not take into account other factors..." -- it is not clear what "other factors" the FTC meant. But isn't FTC suppose to be critical of such mergers?
Posted by Aco at 8:47:00 AM
Friday, May 21, 2004
Russ Roberts of Cafe Hayek offers an answer to the Kling-Cowen discussion on Hotelling-Simon puzzle. Kling follows Hotelling ("oil prices rise at the rate of interest"). Cowen rises the Simon's finding ("natural resources get cheaper over time in real terms"). Roberts reconcile the two with "creativity and innovation". His coblogger, Don Boudreaux, on the other hand, invites us to think of mosquito sucking on a balloon of blood. It's the size of the balloon that matters. But we don't know for sure how much blood the balloon has.
Posted by Aco at 3:04:00 AM
Thursday, May 20, 2004
Have you experienced bugs acting for YOUR advantage? Gmail, the email vehicle provided by Google is having "problem" with the new service. Instead of providing a free 1-gigabyte storage to users, for some reason, we get 1 terabyte! -- "too bad", they said this was a bug...
Posted by Aco at 9:54:00 PM
In Indonesia, we have Dorodjatun Kuntjoro-Jakti. As an economist, he is one of the bests the country has. But history tells, being a good economist doesn't mean you can be a good politician. Now, India has just appointed Manmohan Singh as its next prime minister. Singh is a well-known economist trained in Cambridge and Oxford. He has been the man behind Indian liberalization. However when it comes to politics, "...He's miserable..." -- or so says Jagdish Bhagwati, Singh's friend.
Posted by Aco at 4:19:00 AM
Wednesday, May 19, 2004
Scroll down a little bit, you'll find my earlier post commenting skeptically on Indonesian's Minister of Energy and Mineral Resources overconfidence on Indonesia and OPEC in regards with oil price hysteria. Now, this news confirms my distrust. We are now a net CRUDE importer! (It's widely known that we are not good enough to refine our own oil. But now, even the crude we have to import!) We really have problem inside. It's the bad management.
Posted by Aco at 9:51:00 PM
Reading discussion on oil by Kling and Cowen, I follow Cowen's link to Julian Simon's bet with Paul Ehrlich. Eventually Simon wins. Does this mean Hotelling (a finite resource will increase in price by the same as the interest rate) was wrong? Or, just like Cowen said, we simply are confused?
Posted by Aco at 9:38:00 PM
Tuesday, May 18, 2004
I am leaving back for Indonesia. It's been four years since I last saw Jakarta, and eight years since I visited Makassar, my hometown. Have been looking forward to come home. To places I love. To people I long for. Then enter... this mixed feeling: Graduation ceremonies yesterday and the day before, they were so ... -- can't find the word. Now, feel really sad to finally leave this campustown. And nice friends...
Posted by Aco at 2:44:00 AM
An opinion in Arab News introduces an interesting study by an Illini senior, Devon Largio. She has been studying the rationale for Bush's war in Iraq. One of her findings is that Bush switched focus from Al Qaeda to Iraq (i.e. Osama to Saddam) even earlier than 9/12/01 (as told by Richard Clarke). Here is the link to the thesis.
Posted by Aco at 2:29:00 AM
Saturday, May 15, 2004
Friday, May 14, 2004
Indonesian Minister of Energy and Mineral Resources who is also the acting secretary-general of OPEC is confident that OPEC members would agree to increase oil production ceiling to stabilize price. As for me, I have little faith on cartel. Are we going to be 1980's Saudi Arabia? Or can we just rely on cooperation from non-OPEC members like Russia, Mexico, and Norway? My hunch is, no.
Posted by Aco at 3:28:00 AM
So everybody is talking about a recent article by oil economist, Morris Adelman in Regulation. (To my regret, I was lazy when I wrote a paper on this issue for Resource Economics class). Adelman goes "...There is not, and never has been, an oil crisis or gap. Oil reserves are not dwindling. The Middle East does not have and has never had any 'oil weapon'.". Commenting on U.S. policy, Adelman writes "... From the Nixon White House to the present, all administrations have approached oil and energy with command-and control policies. None of them attempted to analyze the problem using the price mechanism...". He conludes, "... U.S. policies are based on fantasies not facts: gaps, shortages, and surpluses... The myth is part of the larger myth that the world is running out of oil".
Posted by Aco at 2:56:00 AM
Wednesday, May 12, 2004
Alex Tabarrok of Marginal Revolution introduces a very cool website created by Josh On. This link brings you to Alex's post. It has an example of how the New York Times relates to Pepsi, Sears-Roebuck, Lucent Tech, etc. Are all these business giants necessarily biased to the left? Well, maybe not. Economics doesn't really care with political ideology.
Posted by Aco at 11:07:00 PM
Sunday, May 09, 2004
Just came back from a long trip. Driving to Washington DC, New York, and Boston, I found gas prices so high. Paul Krugman explains about the oil crunch. He argues, "...We can neither drill nor conquer our way out of the problem. Whatever we do, oil prices are going up. What we have to do is adapt...". He also mentions that oil prices hike has something to do with big populations in China and India: "...Lately we've been hearing a lot about competition from Chinese manufacturing and Indian call centers. But a different kind of competition — the scramble for oil and other resources — poses a much bigger threat to our prosperity...". The latter bothers Tyler Cowen, who thinks Krugman is being inconsistent with his stand on free trade: "...I am surprised to see Krugman so qualifying his former belief in the virtues of free trade. Keep in mind that the core theory of international theory is a barter theory. "The Chinese buying oil" and "the Chinese selling bicycles" are just two sides of the same coin. If you don't think one can harm the U.S., you shouldn't, in general, think the other will harm the U.S. either. (Of course if your vision of free trade is we get the bicycles but give up nothing in return, we are worse off relative to that state of affairs!)..."
Posted by Aco at 5:52:00 AM