Factory Farming Is Extremely Inefficient

“It takes seven calories of food input into an animal to produce one calorie of food output.”

And the farm subsidy structure exacerbates the factory farm problem: it encourages farmers to feed corn to cows, a food that they’re not naturally able to digest.

Read the BigThink interview of Jonathan Safran Foer here .

More (Labor) Taxes, Less Work

Here is Greg Mankiw’s calculus.

Immigrants Boost US Employment and Production

According to a new study by Giovanni Peri for the San Francisco Fed:

"The effects of immigration on the total output and income of the U.S. economy can be studied by comparing output per worker and employment in states that have had large immigrant inflows with data from states that have few new foreign-born workers. Statistical analysis of state-level data shows that immigrants expand the economy's productive capacity by stimulating investment and promoting specialization. This produces efficiency gains and boosts income per worker. At the same time, evidence is scant that immigrants diminish the employment opportunities of U.S.-born workers."

Here is the article in the FRBSF newsletter.

Stelzer, Euromess, and "Eurosud"

All over Europe officials are doing the same thing over and over again and expecting different results, writes Irwin Stelzer in the Wall Street Journal.

Greece led the peripheral countries in piling up debts that it had little hope of ever repaying. Non-peripheral countries, most notably Britain and France, joined in the fun. Then, given that national cupboards are bare, the Euroland authorities stepped in with a cunning plan to handle excessive debt: borrow more to repay the previous wild borrowing. The Irish government thus will drive its deficit to 32% of GDP to bail out banks hit by the inability of property developers to repay excessive borrowings.

The current chosen path combines austerity with borrowing by Euroland as a whole. The borrowing in effect transfers the debts of the broke countries to Germany’s balance sheet, while austerity concentrates the burden of repayment on the current recipients of government outlays – public-sector workers, benefit recipients, and private sector contractors for whom the government is a major customer. And it lets the creditors, who made the excessive loans in the first place, off the hook.

However, “history suggests that austerity without loose monetary policy can be self-defeating. Never mind: Eurocrats will pay any price to avoid the humiliation of restructuring and unleashing inflation worries in Germany. So a combination of austerity and tighter credit is in store …”

"Euroland politicians think they can (1) fight markets, (2) inflict infinite pain on voters in democratic countries, and (3) whip the profligate into line. They can do none of these" because markets set the borrowing rates and voters turn out politicians who push them too far.

Sensibly, Stelzer advocates a currency depreciation, large enough to restore competitiveness of the peripheral countries (and maybe of the others also I would argue) to avoid debt “restructuring” and a heavy dose of inflation. But the currency he has in mind would be a newly created “Eurosud”, the result of partitioning the eurozone into two smaller areas.

That would prove, in my opinion, doubly illusory. First a new currency limited to the countries of southern Europe would not constitute an optimal currency area any more than the current eurozone, and the Eurosud "one size fits all" monetary policy would thus not prove adequate for anyone of the member countries. And second, it would raise all the problems of creating a new currency in the middle of a confidence crisis, a daunting task, much harder than a simple return to national currencies (for which national monetary institutions and central bank are still in place) that would soon have to be repeated later, when each country would have to turn back to its own former national currency. It would be much better to proceed directly to that second stage now, especially because the euro is again gaining strength relative to the dollar, losing all the benefits of its beginning of the year depreciation to more reasonable levels.

And meanwhile, interest differential between peripheral countries and Germany keep growing, reflecting the increasing risk of their government bonds.

Maps of Europe and National Stereotypes

Here.

Hat tip: Tyler Cowen

Ptolemy Knew a Lot About Germany's Urban Economy

In 150 AD, the mathematician and astronomer Ptolemy drew 26 maps of the known world in colored ink on dried animal skins. One of these depicts “Germania Magna”, an area far remote from his residence in Alexandria. He nevertheless demonstrated extensive knowledge of the country even though the map has been until now difficult to interpret despite repeated efforts by linguists and historians.

But new work by a group of classical philologists, mathematical historians and surveying experts at Berlin Technical University’s Department for Geodesy and Geoinformation Science has produced, from the Ptolemy’s drawing, an astonishing map of central Europe as it was 2.000 years ago. The map shows that the North and Baltic Seas were known as the “Germanic Ocean” and the Franconian Forest in northern Bavaria was “Sudeti Montes”. It also shows a large number of cities such as Bicurgium (present day Jena) and Navalia (Essen). It turns out that half of the present day cities in Germany are 2.000 years old.

Researchers believe Ptolemy drew on Roman traders’ travel itineraries, analyzed seafarers’ notes and consulted maps used by Roman legions operating to the north. It was primarily surveyors with the Roman army, which appears to have advanced as far as the Vistula River, who collected information on the barbarians’ lands. The researchers had the great fortune to be able to refer to a parchment tracked down at Topkapi Palace in Instanbul, the document being the oldest edition of Ptolemy’s work ever discovered.

The complete article in the Spiegel Online is well worth reading and it includes two photos of the ancient medieval copy of Ptolemy’s map.

Why Monogamy is Prevalent in Rich Nations

A post by Marina Adshade, a professor of economics at Dalhousie University in Halifax, Nova Scotia, with a reference to the original work of three Israeli economists, Eric Gould, Omer Moav, and Avi Simhon, published in the American Economic Review, 2008: “The Mystery of Monogamy”.

Read the Adshade article here.