Three new Policy Research Working papers, a Project Syndicate piece by Ken Rogoff, and an Eduardo Porter column in the New York Times, titled ‘A Keynesian Victory, but Austerity Stands Firm,’ made for an interesting week.
A working paper published this week by Milanovic Branko uses multiple techniques to gauge how close measured inequality is to the maximum inequality that can exist in a given society. Looking at historical data tracing back several centuries, Branko finds that inequality in colonies was pushed almost to its maximum. Branko also looks beyond inequality as measured by income inequality to inequality in social terms.
Harry de Gorter, Dusan Drabik and Govinda Timilsina have a working paper on the relationship between volatility in crude oil prices, biodiesel and oilseeds (soy beans and canola). They find that higher crude oil prices increase biodiesel prices if biofuels benefit from a fuel tax exemption, but lower them when a blending mandate is imposed. When both canola and soybeans are used to produce biodiesel, an increase in the crude oil prices lead to higher canola prices, but the effect on soybean prices is ambiguous.