Lelo Nxumalo

This analysis reveals significant land use changes across South America over two decades. The most striking trend is agricultural expansion at the expense of natural ecosystems. Croplands surged by 225,461 km² (+39.2%) , while Evergreen Broadleaf Forests—primarily the Amazon—declined by 287,426 km² (-4.4%) . This forest loss, equivalent to roughly the size of Italy, underscores ongoing deforestation pressures. Critical Findings: Grasslands expanded dramatically by 349,686 km² (+10.0%) , potentially reflecting forest conversion to pasture Permanent Wetlands experienced a catastrophic 49.9% decline , losing nearly 150,000 km², raising concerns about ecosystem services and biodiversity Savannas contracted by 128,693 km² (-3.5%) The spatial pattern shows concentrated deforestation along the "arc of deforestation" i...

What should we do with carbon tax revenue? New modeling suggests that for the US economy, cash dividends beat tax cuts. The US Context: A "Narrow Base" for Carbon Pricing To understand the economic impact of a carbon tax, we must first understand the structure of the US economy. Our calibration to 2022 data reveals a striking asymmetry: the "Brown Sector" (fossil fuels, heavy industry, utilities) accounts for just 3.7% of US GDP and employs only 1.8% of the workforce, yet it generates 55.7% of national greenhouse gas emissions . This concentration presents a unique policy opportunity. A $100/ton carbon tax targets a tiny sliver of economic activity to achieve massive reductions. In our simulation, this tax drives a 41% reduction in emissio...

How well do quarterly changes in PMI predict economic growth? An analysis of 10+ years of data (Q1 2015 - Q3 2025) When it comes to tracking economic momentum, quarterly changes in Purchasing Managers' Index (PMI) data provide valuable signals about GDP growth. My analysis of over 10 years of data reveals which PMI indicators are the most reliable for economic forecasting. Manufacturing PMI: Moderate but Significant Both ISM and S&P Global manufacturing PMI show statistically significant correlations with manufacturing GDP growth, with S&P Global slightly outperforming. Manufacturing PMI Growth Correlations ISM Manufacturing PMI: r = 0.451 (p = 0.0027) S&P Global Manufacturing PMI: r = 0.520 (p = 0.0004) ...

The Institute for Supply Management's (ISM) Manufacturing Purchasing Managers' Index remains one of the most closely watched economic indicators in the United States. As we reflect on recent trends spanning both the past two years and the broader decade-long trajectory, a nuanced picture of American manufacturing emerges—one marked by resilience, structural challenges, and the enduring impact of global disruptions. The Recent Struggle: Two Years of Persistent Contraction The past two years have been particularly challenging for U.S. manufacturing. From November 2023 through October 2025, the PMI has remained in contraction territory for an overwhelming majority of the period—hovering around an average of 48.4, well below the critical threshold of 50 that separates expansion from contraction. ...

The link between global trade and domestic inflation When import prices surge—whether from tariffs, supply chain disruptions, or currency fluctuations—how much of that increase actually shows up in the prices consumers pay at the store? This question has become increasingly important in our globalized economy, especially as policymakers debate trade policy and try to forecast inflation. The 20-30% Rule A robust finding in economics research is that import price passthrough to consumer prices in the United States is around 20-30%. This means that if import prices increase by 10%, consumer prices typically rise by 2-3%. Key studies establishing this benchmark include: Campa & Goldberg (2005): Found 25% passthrough for the US over 1975-2003 McCarthy (2007): Estimated 20-30% passthrough using structural VAR model...

Between 2017 and 2025, U.S. merchandise import figures seemed to surge dramatically, with headlines often citing record-breaking nominal numbers. However, a significant portion of this apparent growth was not an increase in the volume of goods Americans purchased but was pure inflation. When adjusted for rising prices using the Bureau of Economic Analysis (BEA) chain-linked methodology, the story of real import growth is far more modest. The Inflation Illusion Headline numbers can be highly deceptive. In 2024, U.S. goods imports hit a nominal record of $3,295.6 billion . But when adjusted for inflation (using 2017 chained dollars), real imports were $2,870.2 billion . Figure 1: U.S. merchandise imports in nominal (current) dollars vs. chain-linked real terms (2017 base year). The widening gap reveals how import price inflation masked true volume trends. The most dramat...