Global Economy

Energy production and imports

Europe Pipelines map

As clunky Soviet-era factories and mines have become more efficient or gone out of business, Ukraine’s domestic gas consumption has dropped nearly 40 percent over the past five years, cutting its imports from Russia in half, according to a report by Sberbank Investment Research.

Domestic consumption might drop further if Ukraine trims the generous subsidies it gives households using natural gas, although so few households are paying their bills that it might not matter. “People will go from not paying the lower price to not paying the higher price,” said Thane Gustafson, senior director of Russian energy for the consulting firm IHS CERA.

Even if residential customers paid up, the Ukrainian state energy company, Naftogaz, would lose money on those sales

Is Europe's gas supply threatened by the Ukraine crisis?

more than a quarter of the EU's total gas needs were met by Russian gas, and some 80% of it came via Ukrainian pipelines. Austria, France, Germany, Hungary, Italy and Poland soon reported gas pressure in their own pipelines was down by as much as 30%.

While it was eventually resolved through a complex deal that saw Ukraine buying gas from Russia (at full price) and Turkmenistan (at cut price) via a Swiss-registered Gazprom subsidiary

Countries of the World

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Value Chain Analysis: A Strategic Approach to Online Learning

Value chain

Busy, but Wary, in Europe’s Steel Industry

Why airlines make such meagre profits

In those six decades passenger kilometres (the number of flyers multiplied by the distance they travel) have gone from almost zero to more than 5 trillion a year. But though the industry has done much to connect the world, it has done little to line the pockets of the airlines themselves. Despite incredible growth, airlines have not come close to returning the cost of capital, with profit margins of less than 1% on average over that period. In 2012 they made profits of only $4 for every passenger carried. Why has a booming business failed to prosper?

The declining American high school graduation rate: Evidence, sources, and consequences

Throughout the first half of the 20th century, each new cohort of Americans was more likely to graduate high school than the preceding one. This upward trend in secondary education increased worker productivity and fueled American economic growth (Goldin and Katz 2003)

Heckman, Lochner, and Todd (2008) show that in recent decades, the internal rate of return to graduating high school compared to dropping out has increased dramatically and is now over 50 percent

Rent-seeking” is what economists call a special type of money-making: the sort made possible by political connections. This can range from outright graft to a lack of competition, poor regulation and the transfer of public assets to firms at bargain prices. Well-placed people have made their fortunes this way ever since rulers had enough power to issue profitable licences, permits and contracts to their cronies.

Capitalism based on rent-seeking is not just unfair, but also bad for long-term growth.

It identifies sectors which are particularly dependent on government—such as mining, oil and gas, banking and casinos—

Work Like a German

In the German job-share model (known as “Kurzarbeit”), if an employer cuts an employee’s hours so that income is reduced by more than 10 percent, the government compensates workers for a large portion of wages lost. This enables companies to cut costs during downturns without having to lay workers off.

For the long-term unemployed who take significantly lower-paying jobs (typically, at minimum-wage levels), the unemployment benefits could offer stop-loss insurance to put a floor under their losses.

We have neither the mental capacity nor the understanding to decipher the full web of cause-and-effect relations in our social existence. So our daily behavior and reactions must be based on incomplete, and occasionally misleading, mental models.

Social scientists – and economists in particular – analyze the world using simple conceptual frameworks that they call “models.”

Useful social-science models are invariably simplifications. They leave out many details to focus on the most relevant aspect of a specific context.

Manufacturing the future: The next era of global growth and innovation

Ten IT-enabled business trends for the decade ahead