Climate change involves systemic risk, so it’s not possible to insure against, or diversify away the risk. * Over the years I have sometimes heard investors talk of insuring their portfolios against climate change risks. A group of students once … Continued
People paid to worry about bad stuff happening concluded long ago that one way to destroy the USA as a functioning state would be to explode a high altitude nuclear weapon above the country; the resulting electromagnetic pulse (EMP) would … Continued
To spend time with climate scientists and energy economists these days is to take part in an increasingly tortuous mental conflict. Outwardly, scientists, policy analysts and academics hoping to influence policy must remain positive and optimistic, while keeping a strong … Continued
Evidence from Nigeria shows that access to finance can help households reduce the impact of bad luck, reducing the fall in consumption that they suffer. * Yesterday I was part of a group discussing a draft research paper on the ethics … Continued
We take it for granted that capitalists hire workers rather than workers hiring capital, but why? The main reason is the difficulty of diversifying labour, which means that workers ideally require some form of insurance to offset their concentration of … Continued
Although the world appears a very turbulent place, financial volatility is currently rather low. How do we know this? One method widely used by commentators and market analysts is to refer to a measure of global risk aversion called the VIX. This post … Continued