• economic news summary and agricultural productivity

    How Big Data Helps Little Farms

    Jan 13 • Businesses, Demand, Supply, and Markets, Economic Growth, Economic History, Economic Thinkers, Environment, Innovation, Labor, Lifestyle • 136 Views

    Because the package of BrightFarms arugula said, “This arugula was grown by your local farmer Jason Jackson,” I bought it. But then I was amazed that the fivethirtyeight podcast that I later listened to during my daily walk focused on BrightFarms.

    And the story gets even better.

    Where are we going? To farm productivity.

    Computerized Farming

    A BrightFarm is not your normal farm. They design, build and operate indoor farms in huge greenhouses. The good thing about a greenhouse is that the weather really does not matter. Indoors, you can control your environment. But the question is how and a new firm, Agrilyst, had some answers.

    Agrilyst designed software through which sensors monitoring inputs could work together. Depending on the crop, its growth stage and a host of variables, the sensors determine optimal humidity, air circulation and temperature. They vary light levels to take advantage of peak energy pricing and keep an eye on CO2 levels. Meanwhile, all the farmer needs is her phone and an app.

    This is one of the displays on the farmer’s phone:

    Boosting agricutural productivity with data sensors

    From: Agrilyst

    And here is Agrilyst explaining what they do:

    Indoor farming is year-round. Located near the supermarket, its produce has a longer shelf life because little time is allocated to transport. So, you’ve got cost effectiveness, you’ve got quality and you’ve got control. My excellent arugula was the result.

    Most crucially though, you have a growing use for big data that could optimize productivity on all farms.

    Productivity

    I wonder whether algorithmic innovation will continue the trends that have propelled U.S. agriculture during the past century.

    Farm output is up:

    Farm Productivity

    From: “A Brief History of U.S. Agriculture”

    Farm population is down:

    Productivity up from fewer people.

    From: “A Brief History of U.S. Agriculture”

    Farm size is up:

    Productivity from larger farms

    From: “A Brief History of U.S. Agriculture”

    Our Bottom Line: Malthus

    Perhaps one of the first environmentalists, Reverend Thomas Malthus told us in 1798 that population grows geometrically while resource production expands arithmetically. He thought that resource prices will rise and supply will become increasingly inadequate. Instead new technology has brought monumental strides in agricultural productivity.

     

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  • David Bpwie bonds

    David Bowie’s Financial Innovation

    Jan 12 • Behavioral Economics, Businesses, Demand, Supply, and Markets, Economic History, Financial Markets, Innovation, Labor, Lifestyle, Money and Monetary Policy, Thinking Economically • 115 Views

    David Bowie died at age 69 on Sunday. Remembered by most of us for “Ziggy Stardust,” or “Changes,” David Bowie was also a creative financier.

    Where are we going? To why the financial world will remember David Bowie.

    Financial Innovation

    David Bowie was the first person to sell bonds based on his future royalties. Concerned in 1997 that his future income would be decimated by uncontrollable free internet distribution of his music, he decided to optimize his current income. At first he considered selling his work. But then, he (and an advisor) had a Eureka moment.

    The first step was a licensing deal with a guaranteed income stream. Next, he used that revenue as collateral for a loan–a David Bowie Bond. In that way he retained ownership, got current income instead of gambling on the future, and made investors happy with a 7.9 percent yield for his $55 million bond issue.

    Bowie Bonds and financial innovation

    From: Forbes

    Although the Bowie Bonds were gone after they liquidated in 2007, the concept lived onward. Including James Brown’s music, a Peanuts Comic Strip and 700 films with part of a TV library from Miramax, these bonds just needed a revenue stream that could be linked to an asset. Now known as esoteric bonds, David Bowie’s financial innovation has even been applied to a pub’s cash flow.

    You can see below how this bond market niche has grown:

    Esoteric securities are a financial innovation based on Bowie Bonds.

    From: Bloomberg

    Our Bottom Line: Financial Innovation

    Similar to silly putty, the aircast or the moving assembly line, in finance also we have new products and processes. Including, the junk bond, the money market fund, checking accounts, futures options, hedge funds and ATMs, a list of financial innovation is long.

    But like the Bowie Bond or a transistor, someone invented each new product.

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  • Economic news summary and China's GDP

    The Significance of Cement in China

    Jan 11 • Businesses, Demand, Supply, and Markets, Developing Economies, Economic Growth, Economic History, Government, International Trade and Finance, Macroeconomic Measurement • 127 Views

    China has been using a lot of cement.

    During the past 100 years, the U.S. needed cement for an interstate highway system and new skyscrapers. We built the Hoover Dam, many bridges and suburbia. And yet, from just 2011 to 2013, China used more cement than we did.

    Questions about China's GDP

    Where are we going? To questions about China’s GDP.

    (And a note: When you think cement, think concrete. Cement is the powdery lime and clay substance that we combine with water and gravel or sand to make concrete.)

    Cement in China

    Thinking of China’s urbanization, we could imagine the multiple high- and low-rise concrete structures that were built for the millions of people who moved from the farm to one of China’s hundreds of cities. We could look at the cement that their infrastructure spending on roads and rail and airports has required. All of that cement would have been a part of China’s GDP growth during the last decade.

    And that is the problem.

    As a state-owned industry, cement producers had little need to achieve cost efficiencies. In addition, they were an ingredient in China’s five-year plan recipes that left no room for failure among local officials. The results probably meant low quality, overbuilding and inaccurate statistics.

    Our Bottom Line: China’s GDP

    Composed of government and consumer spending, gross investment (mostly business spending) and exports minus imports, China’s GDP has consistently exceeded the government’s targets.

    Problems with China's GDP

    From: The Washington Post

    With cement but one example of why China’s GDP figures might be questionable, we can see why the current economic slowdown could represent a much bigger problem.

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  • The Economics of Daylight Savings

    Deciding When and Why to Change the Time

    Jan 10 • Behavioral Economics, Businesses, Demand, Supply, and Markets, Economic Debates, Economic History, Financial Markets, Government, Labor, Lifestyle, Regulation, Thinking Economically • 112 Views

    When Daylight Saving Time (DST) begins on March 13, the clock will “spring forward” an hour and then eight months later it “falls back” on November 6. Although we get less sleep for one night, after that we can enjoy more sunshine in the evening and a later (clock time) sunrise.

    Where are we going? To why clock time makes a difference.

    Changing Times

    In Florida, lawmakers will soon decide whether to continue making the switch into and out of DST when they vote on the Sunshine Protection Act. Saying, “as the Sunshine State, Florida should be kept sunny all year-round,” the new law would keep DST during the entire year.

    There is one glitch. Florida would be violating federal law. According to the Congress, the states only have two time options. Either skip DST entirely as Hawaii and most of Arizona do or follow the dates established for its annual cycle.

    It all sounded simple until I visited the TimeZoneReport. We have states that follow the DST/Standard time rotation, those who had failed votes to change it, others with pending bills, and another group of states that want to change their time zone or have full DST.

    These are the 21 states that hoped to make a time change in 2015:

    Retaining Daylight Saving Time (DST)

    From: The Wall Street Journal

    Our Bottom Line: The Impact of Time

    Supported and refuted by academic studies, the list of reasons for the optimal time is endless. I have read that where clock time is too different from solar time (as in Spain), then everyone is tired. Thinking of the East and West Coast in the U.S., a gap in clock time can mean that financial markets operate during non-business hours. Meanwhile the U.S. Department of Transportation tells us that more sunshine during the evening decreases energy use, diminishes traffic accidents and increases safety.

    And finally, taking us to the possible commercial benefits of DST, its Floridian supporters say that people will remain longer at the state’s beaches and parks.

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  • The econlife.com economics news summary

    Weekly Roundup: From Savers to Shoppers

    Jan 9 • Behavioral Economics, Businesses, Demand, Supply, and Markets, Developing Economies, Economic Debates, Economic History, Economic Thinkers, Financial Markets, fiscal policy, Gender Issues, Government, Labor, Macroeconomic Measurement, Thinking Economically, US Presidential Election • 114 Views

    Posts Roundup

    missing savigs from gas consumption Sunday 01.03.16

    Finding the missing gasoline savings…more

    economic news summary and missing productivity Monday 01.04.16

    Productivity Worries…more

    more time and lss money from recession shopping Tuesday 01.05.16

    Meeting the recession shoppers…more

    economic news summary, stock markets and presidential elections Wednesday 01.06.16

    How stock markets influence elections…more

    economic news summary and Uber Thursday 01.07.16

    Why taxicab drivers are nicer…more

    economic news summary and sales taxes Friday 01.08.16

    Sales tax wars…more

    Ideas Roundup

    • marginal propensity to consume (MPC)
    • demography
    • creative destruction
    • productivity
    • output
    • consumption expenditures
    • opportunity cost
    • time
    • stock markets
    • monopoly
    • licensing
    • externalities
    • regulation
    • competition
    • elasticity
    • sales taxes
    • fiscal policy
    • tradeoffs
    • state revenue

     

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