Last week we listened to strong words from the Fed, which made it clear that the Fed will fight inflation. And on the brilliant analysis of the global economy by the BIS, which de facto k Its supply, stupid. And we are in the energy stratosphere, and high energy prices will change the Czech economy and standard of living. If you can find an as, I will be happy for the peten and for the peppermints/v nzor.
I came across a pretty good analysis of current issues that says, among other things, “The slowdown appears to be caused by significant changes in relative prices, such as oil price caps, inflation and regulation.” And the fact that it is not a contemporary analysis, but from 1981. The same problems (energy crisis, inflation, slow growth), different backdrops. Used from the 1970s and 1980s, among other things, the first analysis of the BIS: tamed inflation and support for the supply side of the economy.
You may remember that I have written several times about Japanese nuclear power plants. Japan wants to become a prominent world game in nuclear energy again. The government helped the current public money. In 2012, a year after Fukui, 80% of Japanese wanted to switch to nuclear power. Ten years later: 60% of Japanese are in favor of renewed nuclear energy. Sometimes I would like to see a cost-benefit analysis of how expensive it is to let the public money be stolen. Every day, Japan wants to restore the operation of several shut-down reactors. Among other things, this could reduce Japan’s demand for LNG, which Europe would appreciate.
The Guardian wrote about the recently deceased James Lovelock, environmentalist, futurologist, who became most famous as the author of the Gaia theory. Among other things, James said: “And when the effects of climate change begin to manifest, people will look with anger at those who now so foolishly continue to destroy the environment by burning fossil fuels, instead of taking advantage of nuclear energy.”
In the meantime, she recalled her favorite policy of fighting covid: the Chinese authorities announced a lockdown in the city of 21 million people, 成都, or Chengdu. The reason was 900 new ppads in 10 days. For comparison, in our country there were 13,349 incidents in the last 10 days. The Chengdu area represents 1.7%. GDP now, but many suppliers and manufacturers of electronics and cars, as well as a popular park with pandas, sold here.
A good start is that during August, Ukraine was able to export agricultural commodities/products to at least 2/3 of the previous level. After Nord Stream 1 is shut down, gas supplies may be restored, but only for countries that do not adhere to the Russian gas price ceiling. Divide and conquer.
Today we will tackle one important issue related to the energy crisis. Will energy prices lead to a decrease in consumption? Meme slyet, e not much: e.g. The prices of gasoline do not support its consumption, because we need to go to work, bikes, shopping… But in reality, the prices lead to consumption. And that’s enough, as the Economist article summarizing shows.
In the case of gasoline: in the motoring US, when gasoline prices rose by 10%, fuel consumption fell by 3%. Data for Japan revealed similar results. And not only that: high prices led not only to consumption dreams, but also to people driving more carefully to save fuel.
Natural gas: 10% off gas prices (US data) led to an average drop in consumption of 2%. That doesn’t look like a very high level. It is interesting that the dispute has a maturity: in the summer months there was no reaction to the prices of the same day, in the winter households decreased consumption by 4%.
Thus, the dramatic increase in the price of gas, which we see in Europe, is significant. The reaction to such changes (multiples) should be different, not to small changes (low tens of percent). Furnace researchers only found one situation where the country ate a doubling of gas prices, so we know.
Subsidies were imposed on Ukraine in 2015, which led to a significant increase in gas prices: for households that did not invest in better heating or insulation, the doubling of prices led to a 16% drop in gas consumption. The high price has led to serious disputes.
There are also studies that examined various policy approaches that were supposed to help households cope with high prices. In California, a government program cut the marginal price of gas for poor households by 20%. During the following 1-1.5 years, these households increased their gas consumption by 8.5%. This is not the way to go.
Ukrainian households that had problems with paying taxes could apply for a fine tax. And this marriage was not related to consumption, so it preserved the motivation for disputes.
Go better: Austria introduced a discount on the first 80% of typical household consumption. This means that people are highly motivated to limit what is above this limit. This is a much better way: financial help and then motivation to reduce consumption.
Energy disputes are an indelible part of an energy crisis. The data indicate that in R we were able to reduce gas consumption for the first five months of this year by 10% (due to the effect of temperature). Uncertainty about the supply of Russian gas shows that disputes may arise. History shows us that prices play a role in motivating disputes. And a good design of government support until this motivational clause is struck.
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