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Posts tagged “energy economy”

By Andrew Holland on Jun 7, 2012 with 1 response

Will Dutch Disease Follow-on the American Energy Boom?

Stronger Currency

An ongoing discussion among some of us analysts at Consumer Energy Report has been about whether having natural resources like oil or coal is actually beneficial to a country (see Are Countries With Vast Oil Resources Blessed or Cursed?, Oil Dependence — Tom Friedman’s False Narrative, and Oil — Easy to Produce, But Not Easy to Buy).

The argument which I’ve made is that a boom in natural resources production can cover up some short-sighted economic policies; in effect, the earnings from producing oil mean that countries do not have to invest in their education or produce their own manufactured goods. The other side of the argument is that it can only be a good thing for new resources to be found.

Leaving aside the question of whether natural resource wealth undermines institutions or causes corruption (and there is good evidence of a resource curse among developing countries) there is one thing that increased production of oil does, once it gets to be a big enough sector of the economy: it pushes up the value of that country’s currency.

All else equal (as economists always have to say), new production of natural resources strengthens the domestic currency. That’s because those resources are either exported or are used to replace imports.
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By Pierre Bull on May 15, 2009 with no responses

Investing in Alternative Energy is the only way to Slow Dollar’s Decline

Nouriel Roubini, one of the first economists to warn how shaky our economy was, now says that the only way to slow the dollar’s decline is by investing in alternative energy.

By Andy Stevenson on with no responses

Rep. Joe Barton’s Lack of Familiarity with Climate Bill Breeds Contempt

A plan, that in simplest terms would INCREASE our carbon pollution, reduce our energy security, and do nothing to help re-power the American economy.