The Weekly Blip: Friday April 7th 2023
Reading/listening links and hot takes!
Are Federal Reserve results linking temperature changes to slower economic growth replicable?
This recent paper argues not: https://econjwatch.org/File+download/1259/BarkerMar2023.pdf?mimetype=pdf .
The Blip’s Take: The worry with human caused global warming is the risk of extreme non linear effects caused by CO2. Building economic models based on X degree temperature changes over 50 years is a linear type model that typically doesn’t lead to much economic damage relative to GDP growth.
CO2 effects on radiation are convex downwards (sub linear) with increasing co2 concentration (logarithmic), so each increment of CO2 has a smaller effect. Meanwhile CO2 concentrations have moved non-linearly and, more recently, linearly upwards. The key question is what non-linear climate risks are created by CO2 being a lot higher than 150 years ago and continuing to go up.
It’s also weird that the federal reserve is doing climate reports. Better for the central bank to stay independent and focus on stable monetary policy.
How good is Chamath’s investing performance?
Early Facebook exec Chamath has been doing public and private investments for over ten years. His annual report shows onsistent IRRs (annualised returns) above 15%.
Keep reading with a 7-day free trial
Subscribe to The Blip to keep reading this post and get 7 days of free access to the full post archives.