Source: NBER

Despite strong predictions that the COVID-19 pandemic would lead to a “baby bust,” new data demonstrates a more optimistic outlook. A new report from the National Bureau of Economic Research notes that an increase in births in 2021 represents “the first major reversal in declining U.S. fertility rates since 2007.” 

During the first year of the pandemic in 2020, official data showed U.S. births declining by 4%, hitting their lowest level since 1979. Combined with the impact of travel lockdowns on foreign-born mothers — who accounted for 23% of U.S. births in 2019 — researchers anticipated that as many as half a million fewer babies would be born in the U.S. as a result of the pandemic. However, U.S.-born mothers — particularly those aged 25 and younger and college-educated women aged 30-34 — ended up raising the total fertility rate for 2021 by 6.2% over the pre-pandemic trend.

Such findings, while they are focused on the United States, are heartening short-term news for social scientists who have spent most of this year projecting that the global population will peak later this century. A rebound in fertility rates may potentially have a positive effect on connected social metrics such as school enrollment, labor force participation and entitlement viability.

Source: The Economist

The economies of non-democratic countries have been growing twice as fast as countries with democracies, according to official gross domestic product figures, since 2002. But new research using satellite imagery reveals that non-democratic regimes exaggerate annual GDP growth by approximately 35%.

Assistant professor Luis Martinez, from the University of Chicago, used satellite imagery to determine the brightness of a country’s lights at night, which strongly correlates with economic activity. In growing economies, more areas are lit up over time, whereas regions of conflict are darker, according to the IMF. Martinez found that even with the same amount of night-time light growth, autocracies reported higher GDP than democracies.

On average, autocratic countries reported GDP growth of 147%. But satellite data puts that GDP growth closer to 76%. Further research shows that differences between reported numbers and satellite data were more prevalent in more-easily manipulated figures like investment and government spending.

Only five democratic countries appeared on the list of the 20-fastest growing economies between 1992 and 2013, according to official numbers.

“If we rely only on the self-reported data, we’d conclude that autocracies are dramatically outperforming democracies economically,” said Martinez in an interview. “But when you adjust the data based on my model, you get a much more nuanced picture: Democratic countries actually account for 10 of the 20 fastest-growing economies.”

Source: Financial Review

Bitcoin’s impact on the environment is equivalent to gold mining, say researchers from the University of Cambridge. The process of mining Bitcoins uses large amounts of electricity, primarily from fossil fuels like coal and natural gas. Because of these fossil fuels, Bitcoin mining contributed 0.1% to total global emissions in 2019, similar to that of countries like Chile or Bahrain. While Bitcoin-related emissions hit an all-time high in 2021, they dropped 14% this year. The decline is due to a significant decrease in mining profitability (and therefore energy use).

But other experts say that cryptocurrency’s climate impact is less like gold mining and more like beef production, according to a new paper from the University of New Mexico. The researchers estimated that every Bitcoin mined in 2021 under the “proof of work method” added 113 metric tons of carbon dioxide to the atmosphere — a 126-fold increase from the 0.9 metric tons per Bitcoin in 2016. In contrast, blockchain competitor Ethereum claims to have reduced its energy consumption by 99% by switching from proof-of-work to the proof-of-stake model.

“We find no evidence that Bitcoin mining is becoming more sustainable over time,” said UNM associate professor of economics Benjamin A. Jones in a press release. “Rather, our results suggest the opposite: Bitcoin mining is becoming dirtier and more damaging to the climate over time.” 

The European Union’s energy imports from Russia have decreased significantly since the Ukraine conflict started, but rising fuel costs mean that the EU has still spent more than $100 billion on Russian fossil fuels this year. 

While European sanctions have banned coal imports and significantly reduced gas imports, the EU spends about $260 million per day on fuel products, like crude oil and LNG gas, according to the Center for Research on Energy and Clean Air (CREA). The EU has paid Russia as much for gas this year as it did in the first half of 2021, despite receiving a fraction of the amount. CREA estimates that if EU officials had introduced price caps, as well as sanctions, Russian fuel revenues could have been cut by $11 billion.

The EU remained the largest importer of Russian fossil fuels in September, but other countries bought larger shares of Russian fuel. India, China, Turkey and Malaysia had the largest increases compared with their imports at the beginning of Russia’s invasion of Ukraine. In spite of this demand, Russia exported less fuel last month, losing an estimated 14% in revenue compared to August.

Shipping costs worldwide are dropping as the economic slowdown reduces demand and port congestion eases, The Economist reports. The bottlenecks caused by the pandemic, including blockages in China’s ports and California, are clearing up — in part, because inflation has led to higher prices and, therefore, less consumer demand for imported goods. 

The cost of shipping containers has fallen as a result, as much as 64% compared to last year. According to the Drewry World Container Index, the cost of shipping a 40-foot container reached an all time high of over $10,000 in September 2021, but has since fallen to over $3,500 this week. Though this indicates a return to more normal prices, the current average is still 160% higher than pre-pandemic rates.

But the potential end to supply shocks could cause a substantial drop in inflation. Forty percent of U.S. inflation from 2019 to 2021 was caused by supply chain issues, according to recent research by the New York Fed. Without these supply bottlenecks, U.S. inflation would have been 6% at the end of 2021, instead of 9%.