Tag Archives: diminishing returns

Raising Interest Rates Is Like Starting a Fission Chain Reaction

Central bankers seem to think that adjusting interest rates is a nice little tool that they can easily handle. The problem is that higher interest rates affect the economy in many ways simultaneously. The lessons that seem to have been … Continue reading

Posted in Financial Implications | Tagged , , , | 2,489 Comments

What really causes falling productivity growth — an energy-based explanation

What really causes falling productivity growth? The answer seems to be very much energy-related. Human labor by itself does not cause productivity growth. It is human labor, leveraged by various tools, that leads to productivity growth. These tools are made … Continue reading

Posted in Financial Implications | Tagged , , , , , | 2,051 Comments

Overview of Our Energy Modeling Problem

We live in a world with limits, yet our economy needs growth. How can we expect this scenario to play out? My view is that this problem will play out as a fairly near-term financial problem, with low oil prices … Continue reading

Posted in Financial Implications | Tagged , , , , , , | 589 Comments

Putting the Real Story of Energy and the Economy Together

What is the real story of energy and the economy? We hear two predominant energy stories. One is the story economists tell: The economy can grow forever; energy shortages will have no impact on the economy. We can simply substitute … Continue reading

Posted in Financial Implications | Tagged , , , , | 486 Comments

How increased inefficiency explains falling oil prices

Since about 2001, several sectors of the economy have become increasingly inefficient, in the sense that it takes more resources to produce a given output, such as 1000 barrels of oil. I believe that this growing inefficiency explains both slowing … Continue reading

Posted in Financial Implications | Tagged , , , , , | 652 Comments