LOS ANGELES - Matin Qaim, an agricultural economist at the University of Gottingen in Germany, examines the benefits — and stunning potential — of genetically engineered crops in the latest Milken Institute Review.
"The promise of genetic-modification technologies is vast and the perceived risks are overblown," he writes. "They can increase productivity in agriculture, ensuring the availability of cheap food . . . and can reduce the environmental footprint of agriculture by reducing the demand for fossil fuels, toxic chemicals and water." The biggest challenge, he adds, "is how to provide reasonable public oversight in ways that resist the understandable impulse to curb progress."
Also in this issue:
Howard Kunreuther and Erwann Michel-Kerjan of the Wharton School of Business analyze the myopia that contributed to the BP oil spill and other catastrophes. "We don′t invest in costly mitigation measures because the upfront expenses exceed the short-run benefits," they write. But, "We cannot expect policymakers, investors, business executives and homeowners in the position to influence disaster mitigation to act rationally without a financial nudge and/or clearly enforced obligations. We need to give people tangible incentives to do the right things."
Bob Looney, an economist at the Naval Postgraduate School in California, ponders the future of North Korea as its economy implodes. "Ironically, no one (with the likely exception of the great majority of North Koreans) is eager to see North Korea collapse," he writes. "China doesn′t want a flood of refugees; many South Koreans fear the consequences of the economic dislocation. This doesn′t mean that the economy (and the government) won′t collapse one day. But the push will probably have to come from within."
Larry White, an economist at New York University′s Stern School of Business (and a former mortgage regulator), dreams of the day Washington eliminates virtually all the subsidies — and much of the waste and volatility — from the market for housing. "Housing finance can′t be reformed overnight. But the experience of the last few years (in which housing played a key role in triggering a terrible global recession), and the likely experience of the next few (in which the need for deficit reduction will be hard to ignore), could serve as the opening."
The latest edition also includes Chris Meisner, an economist at the University of California, Davis, on why the 19th century gold standard isn′t a good model for reforming the global financial system; Gary Libecap of the University of California, Santa Barbara, on the need to allow markets to allocate water in the Western U.S.; and an excerpt from Zombie Economics: How Dead Ideas Still Walk Among Us, by economist John Quiggin of the University of Queensland.
The Milken Institute Review is sent quarterly to the world′s leading business and financial executives, senior policymakers and journalists. Its editor is Peter Passell, former economics columnist for The New York Times.