Socialism

Gas price shocks and euro area inflation

Retrieved on: 
Tuesday, February 13, 2024
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We document

Key Points: 
    • We document
      how gas price fluctuations have a heterogeneous pass-through to euro area prices
      depending on the underlying shock driving them.
    • How do gas price shocks feed through to euro area
      inflation, and is the pass-through shock-dependent?
    • We analyse the importance of gas price shocks
      for euro area inflation in two steps.
    • We identify three structural shocks driving European gas prices,
      inspired by the literature on oil but tailored to the European gas market: (i) a gas supply
      shock, which reduces the supply of natural gas to the European market, increases the
      gas price and lowers gas inventories; (ii) an economic activity shock, which lifts demand
      for gas due to higher economic production, and finally (iii) a shock to gas inventories,
      when gas prices are driven by precautionary demand by gas companies.
    • First, all three identified shocks are
      important drivers of gas price dynamics, but they differ in how persistently they push

      ECB Working Paper Series No 2905

      2

      up gas prices.

    • The effect on euro area HICP of a shock to gas supply is more
      persistent and somewhat higher than when gas prices are driven by economic activity
      shocks.
    • A final key finding is that the pass-through of gas market shocks to euro area inflation
      appears non-linear.
    • The unprecedented volatility of gas prices
      contributed to the inflation problem in the euro area, with the gas price shocks feeding
      through producer prices, wages and persistently lifting core inflation.
    • More expensive
      energy contributed substantially to the rise in inflation in Europe during 2022.2

      Figure 1: Gas price and euro area Harmonized Index of Consumer Prices.

    • How do gas price shocks feed through to euro area
      inflation, and is the pass-through shock-dependent?
    • For instance, about 75% of gas imports to the euro area arrives
      through pipelines, making gas imports difficult to substitute and gas markets subject to
      3

      See for example the evidence by Rubaszek and Uddin (2020) for the US economy.

    • We analyse the importance of gas price shocks for
      euro area inflation in two steps.
    • We identify three structural shocks driving European gas prices,
      inspired by the literature on oil but tailored to the European gas market: (i) a gas supply
      shock, which reduces the supply of natural gas to the European market, increases the
      gas price and lowers gas inventories; (ii) an economic activity shock, which lifts demand
      for gas due to higher economic production, and finally (iii) a shock to gas inventories,
      when gas prices are driven by precautionary demand by gas companies.
    • First, all three identified shocks are
      important drivers of gas price dynamics, but they differ in how persistently they push
      up gas prices.
    • But when gas prices are driven by
      inventory demand shocks, the price effect typically dies out within one quarter.
    • A final key finding is that the pass-through of gas market shocks to euro area inflation appears non-linear.
    • The unprecedented volatility of gas prices
      contributed to the inflation problem in the euro area, with the gas price shocks feeding
      through producer prices, wages and persistently lifting core inflation.
    • (2022) and Alessandri and Gazzani (2023) identify gas supply shocks using VAR models,
      finding that gas price shocks lead to persistent increases in headline inflation.14 Ba?bura
      et al.
    • (2023) find positive effects of gas price shocks on core inflation in a BVAR for
      the euro area that includes one type of gas shock along a longer list of macroeconomic
      shocks.
    • 3.1

      Data

      For the gas market BVAR model, we use gas quantities, gas prices, gas inventories and
      euro area industrial production, as displayed in Figure 2.

    • (2015) to optimize

      ECB Working Paper Series No 2905

      13

      the posterior distribution.16 The vector Y includes the European gas quantity proxy, gas
      inventories, the European gas price benchmark and euro area industrial production.

    • As demand for gas increases, the gas price also rises
      while inventories fall as agents use gas in storage to partially satisfy higher demand.
    • Shocks to gas
      quantities driven by gas supply or inventory shocks tend to revert to pre-shock levels after
      around five to seven months, while economic activity shocks lead to a more long-lived
      increase in gas demand.19 Dynamics in gas inventories are more similar across shocks.
    • 3.4

      Historical events in the European gas market

      Before analysing the transmission of the different types of gas shocks to euro area prices,
      we show how the model interprets the unprecedented gas price rise in 2022 in terms of
      driving factors, and compare it with previous historical episodes of heightened gas price
      volatility as a way of validating the model.

    • Inventory shocks play a
      slightly smaller role, accounting for 17% of gas quantity and 23% of gas price fluctuations
      while the residual component (i.e.
    • 4

      Pass-through of gas price shocks to consumer prices

      The pass-through of gas price shocks to inflation is likely to be multi-faceted.

    • We first consider four outcome variables y: the European gas price, euro area HICP,
      core HICP and energy HICP.
    • Third, depending on the driving factor, gas price increases can pass through to core
      inflation in the euro area.
    • The results underline that gas price shocks can have important implications for inflation in the euro area ? depending on the driving factor of higher gas prices.
    • Casoli, C., Manera, M., and Valenti, D. ?Energy shocks in the euro area: disentangling
      the pass-through from oil and gas prices to inflation?.

Democratic Presidential Candidate Jason Palmer to Debate Other Candidates in New York City at Free & Equal Elections' Democratic Debate on January 18, 2024

Retrieved on: 
Tuesday, January 16, 2024

BALTIMORE, Jan. 16, 2024 /PRNewswire/ -- Democratic presidential candidate Jason Palmer (www.palmerforpresident.us) announced today that he will be participating in Free & Equal Elections' Democratic candidate debate on Thursday, January 18th in New York City from 8-10pm EST.

Key Points: 
  • BALTIMORE, Jan. 16, 2024 /PRNewswire/ -- Democratic presidential candidate Jason Palmer ( www.palmerforpresident.us ) announced today that he will be participating in Free & Equal Elections' Democratic candidate debate on Thursday, January 18th in New York City from 8-10pm EST.
  • The debate offers a unique platform for Democratic candidates to present their visions and policies heading into the election season.
  • Moderated by The New York Post's Lydia Moynihan, Christina Tobin, and Kwame Jackson and organized by the Free and Equal Elections Foundation, the debate will take place in Chelsea Television Studios.
  • Other confirmed candidates at the Democratic debate on January 18th include Gabriel Cornejo, Frank Lozada, and Stephen Lyons.

How liberal conspiracy theories can be just as destructive as their extremist counterparts

Retrieved on: 
Monday, January 8, 2024

Liberal commentators frequently condemn conspiracy theories that threaten public safety.

Key Points: 
  • Liberal commentators frequently condemn conspiracy theories that threaten public safety.
  • But what if liberal conspiracy theories can be even more wrong-headed and damaging than their fringe counterparts?

Conspiracy theories, right and left

  • Liberal observers often present conspiracism as the preserve of right or left-wingers.
  • Journalist David Aaronovitch and philosopher Quassim Cassam, for example, attribute fallacious conspiracy theorising to the political “extremes”.
  • According to academic Grażyna Piechota, RT is guilty of “building a conspiracy message [and] using it as a political instrument”.

Combating Corbyn

  • But this didn’t stop exaggerated and indeed conspiratorial antisemitism allegations emerging from the British political centre in the mid-2010s to discredit then-Labour party leader Jeremy Corbyn and his supporters.
  • Sacks went further by likening Corbyn to the infamous racist politician Enoch Powell.
  • Corbyn himself repeatedly denied accusations of institutional antisemitism in the party but was suspended for claiming that such charges were “dramatically overstated for political reasons”.
  • Leaked documents from within Labour and an Al Jazeera investigative report found that antisemitism had been “weaponised” against Corbyn by his adversaries.

Trying to topple Trump

  • There were even claims about Trump cavorting with Russian prostitutes in a Moscow hotel room.
  • These liberal conspiracy theories about Trump and Corbyn are as simplistic and fallacious as much leftist and rightist conspiracism because they too often ignore wider economic and political contexts.

Deadly dangers of liberal conspiracism

  • Conspiracism from the centre can also have deadly consequences.
  • For instance, the 2003 invasion of Iraq, described by US intellectual Noam Chomsky as “the worst crime of the 21st century”, was justified by western governments’ false claim that Saddam Hussein could deploy deadly weapons within 45 minutes.


Stephen Harper is affiliated with the Socialist Party of Great Britain. Tom Sykes does not work for, consult, own shares in or receive funding from any company or organisation that would benefit from this article, and has disclosed no relevant affiliations beyond their academic appointment.

The US invented shopping malls, but China is writing their next chapter

Retrieved on: 
Friday, January 5, 2024

Like many Chinese shopping centers, this complex was filled with empty stores that reflected the end of China’s 30-year-long economic expansion.

Key Points: 
  • Like many Chinese shopping centers, this complex was filled with empty stores that reflected the end of China’s 30-year-long economic expansion.
  • From 1990 through 2020, large, shiny shopping malls embodied China’s spectacular economic growth.
  • These centers look familiar to American eyes, which isn’t surprising: U.S. architectural firms built 170 malls in China during this period.
  • The COVID-19 pandemic and the rise of online shopping have devastated foot traffic, leaving the nation with a huge overhang of retail space.
  • As a longtime urban policy scholar, I was fascinated by the new uses I saw for malls in China.
  • In my view, these experiments could become models for new, creative uses of retail space in the U.S., where the mall was invented.

Serving a new consumer class

  • Rising incomes and a massive population shift from rural areas to cities have created a growing middle class with significant purchasing power.
  • Today, approximately 350 million Chinese – 25% of the total population – can be considered middle class.
  • They offered consumers year-round protection from heat, humidity, cold and frost, as well as from busy streets and polluting traffic.
  • Malls were safe environments where the steadily increasing numbers of more affluent Chinese families could shop and eat, stroll and meet.
  • As a result, Chinese media reports abound with stories about well-known stores and venerable malls closing.
  • In China, as in the U.S., what scholars once described as the “magic of the mall” has become an “allure of ruins.”

Malls with Chinese characteristics

  • But the Chinese are making creative use of excess mall space.
  • The Raffles City Mall in Shenzen has a rooftop pet playground, a stage, an art display area and a sun-shaded lawn.
  • The Dream Time Mall in Wuhan contains an indoor snow center that offers ski lessons, ice mazes and tubing.
  • What began as a cathedral of retail consumerism is becoming a place where people can connect and enjoy individual and collective experiences that aren’t available online.
  • Some U.S. malls are moving in this direction, but China is doing it on a much larger scale.
  • Just as former Chinese leader Deng Xiaoping once asserted that his government was pursuing its own version of socialism, with “Chinese characteristics,” the U.S.-designed mall is being rewritten with Chinese characters.


John Rennie Short does not work for, consult, own shares in or receive funding from any company or organization that would benefit from this article, and has disclosed no relevant affiliations beyond their academic appointment.

Fraser Institute News Release: Estonian incomes, living standards, life expectancy improved dramatically after transition to market democracy

Retrieved on: 
Monday, December 18, 2023

When the Soviet Union collapsed in 1991, Estonia began a dramatic transformation back to a market democracy.

Key Points: 
  • When the Soviet Union collapsed in 1991, Estonia began a dramatic transformation back to a market democracy.
  • In 1993, the average Estonian could expect to die more than nine years earlier than the average resident of high-income countries.
  • Before the transition, the average Estonian could buy one-fourth as much food on his annual salary as the average Finn.
  • “Some Canadians support an economic system that impoverished Estonians and shortened their life expectancy,” Mitchell said.

Newly Published! Boat-Rocking Second Edition From American Ex-Prisoner in Cuba Analyzes The True Cost Of Socialism

Retrieved on: 
Thursday, December 14, 2023

Instead of seeking to place blame, Blue’s thought-provoking non-fiction book Losing Freedom compiles well-researched facts into a historical account and modern-day warning that the dream of socialism some have been sold on is a dangerous myth.

Key Points: 
  • Instead of seeking to place blame, Blue’s thought-provoking non-fiction book Losing Freedom compiles well-researched facts into a historical account and modern-day warning that the dream of socialism some have been sold on is a dangerous myth.
  • Written from the perspective of someone who instantly lost his freedom — and almost his life at age 24 — this book shows the relationship of free enterprise capitalism to all other freedoms cherished by humans.
  • “I have written this book to convey the story of free enterprise as the operating system for prosperity and freedom for all.
  • Losing Freedom is available for purchase online at Amazon.com and Barnes and Noble.com.

Salem Podcast Network Welcomes “Man in America with Seth Holehouse” to Its Line-Up

Retrieved on: 
Monday, December 4, 2023

Salem Media Group , Inc. (NASDAQ: SALM) announced today that “Man in America with Seth Holehouse” has been added to the line-up of the Salem Podcast Network, effective today, December 4, 2023.

Key Points: 
  • Salem Media Group , Inc. (NASDAQ: SALM) announced today that “Man in America with Seth Holehouse” has been added to the line-up of the Salem Podcast Network, effective today, December 4, 2023.
  • View the full release here: https://www.businesswire.com/news/home/20231201083777/en/
    Since its launch two years ago, “Man in America” has grown to reach over a million people each month, across audio and video platforms.
  • Now, as a podcaster, YouTuber, and television personality, Holehouse has continued to fight against communism and socialism on each episode of “Man in America”.
  • Each day Salem serves a loyal and dedicated audience of listeners and readers numbering in the millions nationally.

Jonathan Emord, Republican Candidate for U.S. Senate, Endorses Donald J. Trump for President of the United States

Retrieved on: 
Wednesday, December 6, 2023

CLIFTON, Va., Dec. 6, 2023 /PRNewswire/ -- Jonathan Emord, Republican candidate for U.S. Senate and constitutional litigator dubbed the "FDA Dragon Slayer", has announced his endorsement of Donald J. Trump for President.

Key Points: 
  • CLIFTON, Va., Dec. 6, 2023 /PRNewswire/ -- Jonathan Emord, Republican candidate for U.S. Senate and constitutional litigator dubbed the "FDA Dragon Slayer", has announced his endorsement of Donald J. Trump for President.
  • His statement of endorsement follows:
    "I encourage all Virginians and Americans to support President Trump as he campaigns on a record of unparalleled achievements.
  • As our Republican nominee, President Trump will offer a clear contrast with the failed administration of Joe Biden.
  • I therefore endorse Donald J. Trump to be America's next President."

New Book: Latin America's Experience Shows How Markets Can Help Urban America Overcome Government-Created Problems

Retrieved on: 
Monday, November 13, 2023

The book builds upon the experiences of Beyer, the founder and editor of the Market Urbanist, traveling through Latin America exploring how market urbanism -- or private-sector actions that create organic growth and voluntary exchange within cities -- works in developing countries. It offers lessons from the cities visited on his trip that should be studied by urban centers in the U.S.

Key Points: 
  • "For all its high-level socialism, Latin America is in many ways a place where it's easier to own a home, start a business, or move as you choose," said Scott Beyer, the author of "Latin America's Urban Experience."
  • "California shouldn't copy everything about Latin America -- especially the socialism that is built into its political history and fabric.
  • But state policymakers would do well to learn from the best aspects of Latin America's urban policy."
  • PRI's Free Cities Center cultivates innovative ideas to improve urban life based around freedom and property rights -- not government.

Israel, Palestine and the Labour party history that has made Keir Starmer's position so difficult

Retrieved on: 
Wednesday, November 8, 2023

I can’t think of any colony or mandate that was as demanding intellectually and emotionally as Palestine.

Key Points: 
  • I can’t think of any colony or mandate that was as demanding intellectually and emotionally as Palestine.
  • I said: “I found the British still very emotional about Palestine.
  • Why?” And he said: “It’s associated, don’t you think with partisanship with one side or the other.
  • I can’t think of any colony or mandate that was as demanding intellectually and emotionally as Palestine.
  • Mayhew, a staunch anti-communist, found himself out of sync with the zeitgeist and abandoned Labour for the Liberal Party.

Internal rivalries

  • There has thus been a powerful tendency for the antagonisms of the Arab-Israeli conflict to map onto Labour’s own internal rivalries and the factional battle for control over the party.
  • Between 1945 and 1967, this usually manifested itself as a clash between a pro-Zionist left and an anti-Zionist right.

Starmer’s predicament

  • Keir Starmer’s political positioning on the 2023 Gaza conflict is shaped by his experience of the more recent chapters of that history.
  • He has sought to rebuild trust with the British Jewish community and distance the party from what many see as the toxic image it acquired under Corbyn.
  • These are all pressures and dangers that can be expected to grow as the Gaza conflict intensifies and its human costs mount.


James Vaughan is affiliated with the Jewish Labour Movement