Lower Oil Prices: Net Effect On US Economy: One Big Goose Egg -- Brookings Papers -- September 16, 2016

The effect of lower oil prices on US economy:

We explored the effect on U.S. real GDP growth of the sharp decline in the global price of crude oil and hence in the U. S. price of gasoline after June 2014.

Our analysis suggests that this decline produced a stimulus of about 0.7 percentage points of real GDP growth by raising private real consumption and an additional stimulus of 0.04 percentage points reflecting a shrinking petroleum trade deficit.

This stimulating effect, however, has been largely offset by a reduction in real investment by the oil sector more than twice as large as that following the 1986 oil price decline.

Hence, the net stimulus since June 2014 has been effectively zero.

We found no evidence of an additional role for frictions in reallocating labor across sectors or for increased uncertainty about the price of gasoline in explaining the sluggish response of U.S. real GDP growth. Nor did we find evidence of lower oil costs stimulating other business investment, of financial contagion or of spillovers from oil-related investment to non-oil related investment, of an increase in household savings, or of households deleveraging.

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Sharp-Eyed Readers Will See The Spin In The EIA's Conclusions 

Regarding This Graph

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Epigenetics 

A Note To The Granddaughters

Biology 101 for me in college decades ago began with trying to understand the DNA code and how it worked. RNA? Only three: tRNA, mRNA, and rRNA. Today: no less than a dozen different types of RNA, most of which I am only vaguely aware.

For our granddaughters, they will "understand" all of that before they even "graduate" from ninth grade.

This is where they will start in college, biology 101: epigenetics. 

I find the hard copy difficult to read: the paragraphs are long; sections are not broken up; and, some writing seems overly difficult to read. But having said that, slowly reading Steven Rose's article on epigenetics in the current issue of London Review of Books is a nice jumping off point to get a feel for epigenetics.

In a relatively long article on the subject, Steven Rose puts it altogether in one paragraph, which I have broken up into three paragraphs:

For molecular biologists, the task has been to discover the mechanisms by which external causes switch genes on and off.

This has meant coming to terms with the significance of the fact that DNA is not a naked molecule but is protectively wrapped in a cling-film of proteins – histones – portions of which have to be peeled away before any particular length of DNA can be read; environmental factors affect the peeling process, and therefore the selection of genes to be read.

A second important finding has been that during development segments of DNA become ‘marked’; a small molecular chunk, a methyl group (CH3), is attached to one of the DNA bases (generally C, cytosine). The presence of the methyl group prevents the DNA from being read – that is, it switches the gene off. Removing the methyl switches the gene on again. As the field of epigenetics develops, many more such mechanisms are likely to be discovered.

In data point form:

• epigenetics: how the environment affects DNA 
• two processes currently known
• histones: DNA wrapped in histones (think Saran Wrap) cannot be translated or transcribed
• methylation: the presence of a methyl group on any one of the four DNA bases (A, C, T, G) prevents the DNA from being read
• more such epigenetic processes likely to be found
• this is where biomedical research is headed
• example: methylate one of the bases in one of the genes that increases one's risk for breast cancer

A new field of study has been opened up: the Extended Evolutionary Synthesis (EES). From the linked article:

In this way, the EES recognises that processes other than natural selection contribute to evolutionary change.

This would have been no surprise to Darwin, who repeatedly emphasised that he saw natural selection as the major, but by no means the only evolutionary mechanism.

Yet the EES remains contentious. The announcement this year that the John Templeton Foundation, a Christian funding agency, has awarded an $8 million grant to a multinational team of researchers, led by the evolutionary biologist Kevin Laland, to work on the EES has caused a rumble of dissent from hardline Neo-Darwinists.