In economics everything is connected with everything else, and the difficulty is to figure out the connections.
Right now I’m trying to figure out
subprime mortgage collapse -> **** -> rising global food prices
One problem here is that I’m not a farmer so I know nothing about the economics of agriculture. In particular, I don’t know how a farmer interacts with the credit markets.
Michael Pettis has argued that the inflation in China is due to monetary policy, but the one thing that makes me suspect that there is much more to the story is that it isn’t obvious why RMB exchange rates should increase food prices in Haiti.