Tag: economics

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Psych-inflation

The economic narrative and measurement of inflation is incomplete without the proper account of the psychology of the price building process and mechanisms. After the 2 previous oil-crises of 1973 and 1979, the panic about not having enough oil and derivatives within the coming months, has lead to prices increases almost instantly. Despite the fact that there is enough oil floating on ships and in pipelines for 3-6 months, depending on estimates, the psychological effect of being eventually short of oil creates “Psych-inflation”. Oil markets use the “Angst of disruption” to make additional profits on people and enterprises’ hoarding behavior. There are powerful interests to exploit such potential shortages as it is a suitable time to reap some extra profits, particularly for those who knew early about a likely military conflict.

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AI data Input

If you ever wondered where the information from AI and AI chatbots comes from, you will not be surprised that this webpage schoemann.org is regularly solicited for such purposes. The number of crawlers, that do so, is quite large. The ability to trace what exactly they are harvesting on your website, is quite a tricky issue. At least a basic awareness of how the internet has been transformed in the last few years becomes evident through the comparison of unique visits, many through search engines like Google search or others, with the amount of contacts by AI-associated crawlers (see slide from own webpage below).
During he last month up to 2026-4-27 there were about 75.000 contacts, compared to 93.000 during the previous month.
At first sight, AI chatbots have largely outnumbered the “personal visits” of my webpage (see evaluate web analytics). On the other hand, I have no information of how many visits are, (at least potentially) re-directed hints from AI chatbots to my content.
In terms of “traffic” for a webpage, the information of how the AI-driven or AI-assisted search operates with other persons’ contributions will be the challenge of the coming years. If AI chatbots had to pay 10 cents per visit, I would have a comfortable pay every month from this content use. The issue of AI paying for access to reliable and high quality content has to be dealt with sooner rather than later. You may prompt a chatbot on this issue.
Meanwhile: My New Book on AI is out Now 2026-4-28:
“AI and Social Science: Potentials versus Limitations” by Dr. Klaus Schoemann, online reading and free download (here) before implementation of Paywall later on.

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Polychrome tree

Maybe it is just a matter of taste whether you prefer a tree polychrome i. e. in full colors in spring or more monochrome during winter in almost black against a white background. Others might argue that it is not a singular version or time of the tree’s growth cycle, but the steady change. In any case the same tree never looks the same before and after rain. The only certainty is “the times are a changing”, so do our preferences. They are changing as well from time to time. Few persons have similar preferences over the life course and business, marketing and societal changes drive such changes. Often we hardly notice them. Trees are a perfect point of reference to check your personal preferences. Our smartphones track our preferences just by analyzing frequencies of photos taken over months or years. They have a very differentiated polychrome view of us. The reasons to take ugly pictures might confuse the AI-assisted exploitation of our polychrome or monochrome preferences. 

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Democracy in Nepal

Nepal has witnessed a peaceful revolution in which the young generation of Nepalis has “out-smarted” the previous rulers of Nepal. With close to a 2/3 majority of seats in parliament (Nepali Times), the RSP as the party of a somehow charismatic musician and performer has a 5 year mandate to tackle the many challenges to bring real change for Nepali people. The hopes are running high that corruption will be contained and enough jobs inside Nepal can be created for the young. The positive sign, that many Nepalis migrant workers who had left the country now return to Nepal, encourages further support by international donors and investors.
Running a democratic election in a country that comprises the Himalayan mountainous region is confronted with a particular challenge to make every vote count as communication with remote areas takes additional time and effort. Campaigning through social media can be more effective only if even remote areas have reliable access to the internet. Inter-generational assistance is often a precondition of timely access to information. The Himalayan region experiences already the effects of global warming as melting of glaciers. It is the youngest generation that will have to confront the consequences. Time to take government in their own hands, and beyond a one man show. (Image: ESA Himalayan Mountains, ESA Standard Licence) 

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Regulation and bureaucracy

Economists will celebrate 55 years of the theory of regulation pioneered by George Stigler, which was published in 1971 in 2026. The basic question asked at the time and today is: why do we have regulation? The pubic choice and political economy answer of Stigler (1971) and many scholars after him, is that the industry of a specific sector will acquire the regulation or the public interest in this regulation and, subsequently, the industry will design and operate it to its benefits. At least, this is in a nutshell my summary of the literature inspired by Sam Peltzman (2021, p.20). If we add to this the perspectives of theories of bureaucracy (Sharma, 2020), we become skeptic of an efficient implementation of regulations by governments or governmental agencies.
In the field of pharmaceutical applications, it is the “European Diabetes Forum” which calls for a regulation on reliable “glucose monitoring devices” with industry and user backing. Of course, this asks for bureaucratic control of the regulation, imports and markets of such devices later on. The one (regulation) is rarely coming without the other (bureaucracy). It is about time to acknowledge this for societies as a whole as well.

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Premium for silence

People are willing to pay a premium on housing prices for a more silent environment. In the study Enrico Moretti & Harrison Wheeler (2025) estimate that the construction of a silencing wall near a noisy traffic junction or road will increase prices for every decibel of noise reduction by about 3%. Distances closer to the noise shields get higher increases and this mechanism works even up to 400 meters away from the isolation. The investment in decibel noise reductions (not statistical noise) meets a willingness to pay a premium on housing prices. Investment in positive environmental effects (silence) have an obvious marketable premium value. This is most likely just the obverse effect that noise nearby housing is penalized and part of the social mechanism of gentrification. Housing prices and rental costs are known to be powerful drivers of gentrification as well.

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Bulimia Capitalism

Each time a wave and speculative bubble in the economy is building up or even bursting there are thousands of people who become drawn into chaos. Let us quickly review: Oil bubbles in the 70s, financial crisis and  subprime lending in housing markets, 1st internet bubble and the year 2000 bugs, AI excesses in 2025. These boom and bust cycles resemble the medical and psychological patterns of a bulimia nervosa. The overly optimistic outlook for AI companies’ future profits and shifts in the size of office space needed for companies announce bulimic behavior when at the same time vomiting by the same companies occurs with regard to investments in nuclear energy plants even in the sites like Fukushima in Japan or Three Mile Island in the USA. Bulimia Capitalism seems to be eating its own children. The upcoming year 2026 will be full of revelations in this respect. (Image: collection of about a hundred barbies exposed on a flea market in Brussels on 5 levels).

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Robotics Hype 2026

Towards the end of 2025, it is common practice to look back on the last 12 months to summarize a year and to contribute to the “collective memory” of the year. From a “society and technology” perspective we shall not be surprised if such summaries will be full of images and praise of AI and robotics. However, large parts of the innovations that shall be declared to have marked 2025 were already around 10 years ago. It is just the timing for the new momentum and the creation of a hype around these technologies that is really remarkable (compare WSJ 2025-11-24 p 1-2 by Konrad Putzier).
It is true, playing around with robotics was reserved to universities, research institutes and some big players in industry. The public and financial markets showed little interest in these “nerdy” fields of applications. Although we were hardly able to compete with our chess computers, Watson solving math problems for us including the steps for us to follow. Video, image and textual support was provided by specialized applications already at high levels and in multilingual versions. In 2025 these techniques have enhanced with machine learning and neural network programming reaching higher speed and being able to use ever larger data sets as input.
But there are areas where the hype is coming to an end. How about all the artificial reality (AR), virtual reality (VR) applications? Many have seized to exist. Have you visited or invested in “Second Life” platforms? Opened a shop in the VR-world? Bitcoins have lost 7% of their value between 1.1.2025 and 24.11.2025 and they suffer still from high volatility rather than an uninterrupted rise.
War has fuelled the rise of shares in 2025 and “dual-use” technology benefits as well. AI has been driven by, and drives both trends.
In sum, it is much less the technological innovations in 2025 that are astonishing, but the political economy of how to orchestrate a sensational hype around the technologies.
(Image Hannover Industry Fair 2016-3-14).

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All electric again

The “all electric society” has been identified by Dan Wang and Arthur Kroeber (2025 p.48) as one of the underlying driving forces of “The real China Model”. Despite the heavy reliance and pollution caused by China’s use of coal, the large share of electricity  (30%) of energy use is unmatched by the rest of the world except Japan. Investment in electricity grids and innovative ways of mobility around electricity will allow China to buzz rather than steam ahead. Solar cells, batteries for electricity storage and innovative ways of distribution of electricity through AI enhanced “learning” devices will widen the gap between China and other countries that suffer from inefficient path dependency.
Taking the advent of the “All electric society” seriously will free resources through the focus on future-proof technologies. We should not be afraid of the sparks of a short-circuited “All electric society”, the environmental challenges ahead for all of us, particularly China, ask to shift to high voltage solutions urgently. 

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Political Economy 2025

As the global markets have moved from an international economic system based on competition to a world of protectionism based on arbitrary tariffs and restrictions, it feels strange to spot banners in Brussels in 2025-10 entitled “Competitive Europe Summit”. Participants at the conference appear to be “barking up the wrong tree”. In industries, and even more so in most services, access to markets is the necessary condition to embark on competition. No access, no competition. Tariffs or taxes are created to stifle competition.
All this has multiple reasons. One reason is to create an equal playing field among countries. Previously, we thought exchange rates of currencies and eventually purchasing power parities would shift following changes in competitiveness. This mainstream economic thinking has been disrupted through Putin’s war on Ukraine territory. The MAGA political economy narrative has impacted the competition between countries as well, (1) with its rhetoric and (2) back and forth changes in tariffs. Competition with countries which do not respect basic principles of fairness in competition can no longer be confronted with a mantra of a “competitive Europe”.
A more unified Europe could deal with the “politico-economic” fact that the global economy is much less concerned with the idea of competitiveness than in the last few decades of the last millennium (70s, 80s, 90s). Powerplay between nations maybe regarded as a kind of competition for dominance, but a sole focus on economic competition is grossly misleading nowadays after 3 years of the Russian aggression, at least with a focus on the short and middle distance run.