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Willem Buiter thinks water will be bigger than oil
The folks at Citigroup are a thirsty bunch.
In a 37-page note on Thursday, the bank’s global strategists recommend investors play the urbanisation trend by buying into water companies (these ones to be specific), arguing that the concentration of the world’s population and increasing standards of life will drive up demand for the liquid commodity.
Even Willem Buiter, a man most often seen railing at the vagaries of central banks, gets stuck in, with a 4,000-word essay on the subject. Which means we could now discuss whether the Citigroup economist thinks water is a public good (he says it’s private), whether it’s excludable (i.e. lends itself to property rights — he says it does), whether it’s a merit good as defined by Richard Musgrave back in the 1950s (it’s not) and whether, since it is essential to life, it should be free (to which his answer is a curt ‘no’).
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