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CommieGIR posted:Juicing is a different way of saying "Cooking the books" I don't think even the Chinese central government knows how fast the country is actually growing because local officials have an incentive to inflate growth figures so they get promoted.
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Sep 30, 2015 03:18
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CommieGIR posted:Juicing is a different way of saying "Cooking the books" I don't think that's what Helsing meant. And while we can debate the numbers, there is no question China has grown "a lot".
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Sep 30, 2015 03:20
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asdf32 posted:I don't think that's what Helsing meant. http://www.economist.com/blogs/freeexchange/2015/07/chinese-economy http://www.wsj.com/articles/chinas-true-growth-is-a-mysteryeconomists-weigh-the-clues-1430071125 No, they are not growing as much as they think they are. In fact, like Typo pointed out, its entirely possible the government is no longer even sure how much growth is real and how much is masked by inflated numbers and government stimulus. What's more, China's growth, whatever growth is there, is steadily slowing. We can't be sure how much of the growth is real. They have grown a lot. But that doesn't mean their growth is sustainable or even fully fleshed out.
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Sep 30, 2015 03:24
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Typo posted:Poor countries with really awful institutions grow pretty fast too, India and Egypt pre-2011 are two examples. I mean more graduating from middle income to high income, which is what Latin America failed to do and has basically never been done outside of edge cases like South Korea, which is still at the poor end of developed countries And no, wiki has Argentina at $13,000 GDP/capita, it's nowhere near the US or Western Europe icantfindaname fucked around with this message at 04:15 on Sep 30, 2015 |
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Sep 30, 2015 04:12
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icantfindaname posted:I mean more graduating from middle income to high income, which is what Latin America failed to do and has basically never been done outside of edge cases like South Korea, which is still at the poor end of developed countries The other Asian tigers, Hong Kong, Singapore, Taiwan and then Japan before that are the primary examples. The best conclusion is that it comes down to decent government which is able to improve institutions as the economy develops. With "bad government" (very hard to define) you stall like Argentina (which was unstable and made some huge mistakes). asdf32 fucked around with this message at 12:51 on Sep 30, 2015 |
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Sep 30, 2015 12:48
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asdf32 posted:The other Asian tigers, Hong Kong, Singapore, Taiwan and then Japan before that are the primary examples. Can you be more specific with your statement? Draw correlation to what you're saying and talk about what caused it? Provide information or at least "talk in theory"? Explain what parts are missing things like that. I wouldn't be a hardass about it if the data wasn't out there already.
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Sep 30, 2015 14:56
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Veskit posted:Can you be more specific with your statement? Draw correlation to what you're saying and talk about what caused it? Provide information or at least "talk in theory"? Explain what parts are missing things like that. I'm not sure what you're asking for but we're pretty far from the topic of the thread. Those are a list of countries which have succeeded at developing. But development economics is far larger in scope than fiscal or monetary policy. Both play a role behind the scenes but are actually subordinate to the overall political/economic environment (I.E trade policy, regulations, stability, rule of law etc).
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Sep 30, 2015 15:35
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asdf32 posted:The other Asian tigers, Hong Kong, Singapore, Taiwan and then Japan before that are the primary examples. Japan shouldn't really be on that list, it started industrializing in the 1880s. You might as well put Germany on there too. The fact is that South Korea, Taiwan, and a handful of tax havens, oil baronies and city states don't really constitute a meaningful body of evidence that moving past the middle income trap is feasible for most developing countries
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Sep 30, 2015 16:02
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asdf32 posted:I'm not sure what you're asking for but we're pretty far from the topic of the thread. Those are a list of countries which have succeeded at developing. Explain how Agentina's "bad government" dictates fiscal policy and how it is crumbling their economy. Or come up with something more imaginative. If you bring up trade policy then that's always interchanged with monetary policy. Regulations are often fiscal policy driven, stability is can be about collecting. Do something. icantfindaname posted:Japan shouldn't really be on that list, it started industrializing in the 1880s. You might as well put Germany on there too. What's the middle income trap?
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Sep 30, 2015 16:03
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Veskit posted:What's the middle income trap? Basically the inability of a country, once it has progressed from a subsistence economy to a basic industrialized one, to continue increases in productivity and GDP https://en.wikipedia.org/wiki/Middle_income_trap quote:The middle income trap is a theorized economic development situation, where a country which attains a certain income (due to given advantages) will get stuck at that level.[1] icantfindaname fucked around with this message at 16:17 on Sep 30, 2015 |
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Sep 30, 2015 16:10
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icantfindaname posted:Basically the inability of a country, once it has progressed from a subsistence economy to a basic industrialized one, to continue increases in productivity and GDP, usually because of bad institutions I think I learned about this back in school a while back in where countries try sending their bright students to foreign colleges to gain a ton of knowledge and then they never move back and waste a lot of money being unable to fund education themselves and get stuck in that cycle. You could devalue the currency a lot but unless you have something to export besides cheap rear end labor then you're stuck in that. Is India on the cusp of being there?
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Sep 30, 2015 16:18
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Veskit posted:What's the middle income trap? Basically, that there is a intrinsic difficulty for "middle income" states (12-30k GDP per capita PPP ish) to move to higher income status for a variety of reasons. One of them is simply the cut throat nature of manufacturing where usually the lowest wages win and thus investment will flow to stable low income states such as India, Bangladesh and Vietnam. Anyway, Taiwan/South Korea/Japan all have the similarity of being US allies that heavily invested in electronics manufacturing during the post-war period. However, this doesn't seem to be an immediate path to success that is easy to copy especially since electronics manufacturing has become far more globalized over time. That said, there are plenty of things that went wrong in Brazil, Argentina, and Russia and there isn't a whole lot to fix it. Hell, it even looks like Chinese growth is slowing long just as they reached middle income status. Ultimately, I think Taiwan/South Korea/Japan grew during a "goldilocks" zone from 1945-1997 when global competition was limited, and there was gigantic ROI in manufacturing, especially for the US market. Admittedly, stability helped as well as an successful invested strategy, and a open and prosperous potential market.
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Sep 30, 2015 16:22
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Veskit posted:I think I learned about this back in school a while back in where countries try sending their bright students to foreign colleges to gain a ton of knowledge and then they never move back and waste a lot of money being unable to fund education themselves and get stuck in that cycle. India's not even at that point yet, middle income is usually around $10,000/capita/year GDP, while India according to Wikipedia is at $1800. Middle income countries are basically Latin America, China, Russia and Eastern Europe, along with the less hosed up parts of SE Asia and the ME like Turkey and Malaysia But the point is that even once you've gotten past the immediate barriers to development that face the poorest tier of countries, like civil war and political dysfunction, lack of capital to invest in basic industry and infrastructure, etc, there are still shitloads of very hard to fix institutional issues standing in the way of growth icantfindaname fucked around with this message at 16:31 on Sep 30, 2015 |
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Sep 30, 2015 16:24
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Veskit posted:Explain how Agentina's "bad government" dictates fiscal policy and how it is crumbling their economy. Or come up with something more imaginative. If you bring up trade policy then that's always interchanged with monetary policy. Regulations are often fiscal policy driven, stability is can be about collecting. Do something. I don't have a clue what many of the answers are except some of the bigger picture observations of the Asian tigers or the first world before them. The point that you should take at the moment is that it's not smart to try and lump everything under fiscal or monetary policy. They're just a subset of overall economic policy and not the most important. It's fine to talk about them. But you can't expect the major developmental questions of our time to be phrased in terms of them alone. Which is what it seems you're askin me to do.
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Sep 30, 2015 16:47
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icantfindaname posted:Middle income countries are basically Latin America, China, Russia and Eastern Europe, along with the less hosed up parts of SE Asia and the ME like Turkey and Malaysia The contrast between Latin America and Eastern Europe, including Turkey, is quite illustrative of the main problem facing these countries, I think. Eastern Europe has been doing really well, almost invariably, since the fall of the Iron Curtain, and especially since the beginning of their EEC association. Latin America in contrast has been generally struggling, for decades, to get out of stagnation. There are some apparent possible causes, like different structural paths of development, but the truth is that even countries that didn't rely on e.g. the structural shortcut (i.e. skipping to a service economy without having prior extensive industrial economy), that is mostly countries influenced by the doctrine of Latin American structuralism (Celso Furtado etc.), and which as a result followed a path similar to that of Eastern European countries before the 1990s (national interventionism in preferred industries with little focus on securing foreign investments and emphasis on income distribution), saw themselves falling into one crisis after another. So what is the key difference between the winners and losers in this middle income category? I'd argue it's a systematic predisposition for protectionism in the Latin American countries, borne arguably out of the structuralist legacy and intrenched in institutional path dependency, vs. dedication to open markets in Eastern Europe, Turkey etc., even if such dedication had to be enforced from above, by intergovernmental and supranational processes.
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Sep 30, 2015 16:58
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What effects have the Eurozone bailouts had on the relative value of the Euro? I would think that it would have remained similar or increased in relative value as lenders were investing money into these countries, but I'm pretty new to finance, especially on large-scale levels like this.
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Sep 30, 2015 18:34
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Has there ever been any situation where high interest rates have led to job growth?
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Oct 1, 2015 01:30
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Mr Interweb posted:Has there ever been any situation where high interest rates have led to job growth? They might have existed at the same time but I doubt there's any mechanism where raising interest rates also decreases unemployment.
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Oct 1, 2015 01:34
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Mr Interweb posted:Has there ever been any situation where high interest rates have led to job growth? The intention is to stabilize the economy to prevent a future bust. That's the main benefit. Job growth isn't really it.
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Oct 1, 2015 01:36
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Badger of Basra posted:They might have existed at the same time but I doubt there's any mechanism where raising interest rates also decreases unemployment. asdf32 posted:The intention is to stabilize the economy to prevent a future bust. That's the main benefit. Job growth isn't really it. So is it safe to say that it's nearly impossible to have good job growth without reasonably low interest rates? Cause I would think this would be a fairly easy way to rebut conservative claims that tight money is good for the economy.
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Oct 1, 2015 03:35
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Mr Interweb posted:So is it safe to say that it's nearly impossible to have good job growth without reasonably low interest rates? Not... really  It's shown that lower rates do help with unemployment, but that's a tough thing to show when there's so many variable that it could be a hard fact. Plus you're supposed to raise the rates as unemployment is going down so it makes it even harder. Also austerity is pretty much proven to be good for the economy... when you're rich anyway. It's also good when you have too much growth in the Keynesian sense.
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Oct 1, 2015 03:43
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Mr Interweb posted:So is it safe to say that it's nearly impossible to have good job growth without reasonably low interest rates? Not necessarily. Brazil had good job growth with like 11% interest rates, it just depends on what rates people are used to. If they've been at 10% of 20 years people get used to it, if you raise them up to 15% it will lead to job loss (probably).
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Oct 1, 2015 04:06
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High interest rates encourage saving (because savings accounts will earn more interest). Low interest rates encourage investment (because investing your extra money becomes more profitable compared to saving it) and borrowing(because it's cheaper to take on debt). Thus low interest rates encourage inflation (more people and companies buying things increases demand and therefore prices), and high interest rates encourage the opposite effect. A smart central bank will use interest rates to balance the extremes of economic growth. If the economy is going strong and inflation is rising, the central bank will raise interest rates to slow growth and lower inflation before bubbles form, pop, and crash the economy. If the economy is poo poo and there's not enough demand, the central bank will lower interest rates to ward off deflation and accelerate the recovery. That's what the federal reserve has been doing since 2008. So insofar as raising interest rates is a tool a central bank can use to keep the economy on track, it can lower unemployment in the long run. But right now high interest rates would be counterproductive.
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Oct 1, 2015 05:11
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Mr Interweb posted:So is it safe to say that it's nearly impossible to have good job growth without reasonably low interest rates? Very low interest rates sustained for a long time will probably lead to a bubble and job loss, so the answer is that while moderate or high interest rates don't stimulate job growth per se, they are important to actually protect jobs from imploding. E; FB, should read all replies before posting.
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Oct 1, 2015 07:15
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icantfindaname posted:Japan shouldn't really be on that list, it started industrializing in the 1880s. You might as well put Germany on there too. Japan is on the list because Japan industrialized without benefiting from cultural or geographic proximity with western european first world countries. The 1880's is almost a century later than some of the first industrial states. The point is that the middle income trap is only a trap in modern times given that dozens of now first world states got through, many of them with no real problem. The question of the trap is whether built-in economic advantages now exist that are holding back other states or not. I think the asian tigers are pretty powerful examples that significant economic barriers probably don't exist. Personally, like I said, I think the main barriers are political and still poorly understood.
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Oct 2, 2015 23:38
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The classic middle income trap countries seem to all have monstrous inequality.
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Oct 4, 2015 00:38
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Is there any interesting data on what inequality was like in advanced countries before 1945, say?
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Oct 4, 2015 00:45
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Arglebargle III posted:The classic middle income trap countries seem to all have monstrous inequality. Makes sense from the Kuznets Curve theoretical perspective. Badger of Basra posted:Is there any interesting data on what inequality was like in advanced countries before 1945, say? http://www.imf.org/external/pubs/ft/fandd/2011/09/picture.htm This article has some graphs for couple dozen countries between 1900 and 2010, unfortunately their resolution is pretty awful.
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Oct 4, 2015 00:55
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Arglebargle III posted:The classic middle income trap countries seem to all have monstrous inequality. It's because those countries either never had the postwar middle class phase, or had it forcibly dismantled by the IMF and friends. Applies to Latin America, possibly/probably Turkey, possibly Russia if you squint a bit, etc
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Oct 4, 2015 07:25
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steinrokkan posted:The contrast between Latin America and Eastern Europe, including Turkey, is quite illustrative of the main problem facing these countries, I think. Eastern Europe has been doing really well, almost invariably, since the fall of the Iron Curtain, and especially since the beginning of their EEC association. Latin America in contrast has been generally struggling, for decades, to get out of stagnation. Can you go into more detail about this? I was under the impression that it was protectionism, and pretty heavy-handed protectionism at that, which allowed places like Taiwan, Korea and Japan to get to where they did.
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Oct 4, 2015 08:05
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tekz posted:Can you go into more detail about this? I was under the impression that it was protectionism, and pretty heavy-handed protectionism at that, which allowed places like Taiwan, Korea and Japan to get to where they did. In that case though they found a ready export market to the US, so they had the best of both worlds. Basically, Taiwan/South Korea found something to export and Latin America didn't at least to the same extent. South Korea and Taiwan were both rather corrupt dictatorships of various forms for quite a while as well, so institutionally they really weren't that different. I guess the question is why South Korea and Taiwan did so well at electronics manufacturing, and why the US was so open in allowing market access. Ardennes fucked around with this message at 10:15 on Oct 4, 2015 |
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Oct 4, 2015 10:02
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Cold war. Cool kids club has perks.
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Oct 4, 2015 15:25
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tekz posted:Can you go into more detail about this? I was under the impression that it was protectionism, and pretty heavy-handed protectionism at that, which allowed places like Taiwan, Korea and Japan to get to where they did. They did but protection isn't a binary and import substitution policy which broadly speaking was practiced in Latin America is completely different than the export driven policy of the Asian Tigers. Import substitution is true protection oriented around building internal industries and protecting them from global competition. The export driven policy of the Asian Tigers subsidized internal industries but then then forced them up against competitors in the global market (think Hyundai). One take from wikipedia: https://en.wikipedia.org/wiki/Import_substitution_industrialization posted:Given import substitution's dependence upon its developed and isolated markets within Latin America, it relied upon the growth of a market that was limited in size. In most cases, the lack of experience in manufacturing, plus lack of competition, reduced innovation and efficiency, which restrained the quality of Latin American produced goods, while protectionist policies kept prices high.[14] In addition, power concentrated in the hands of a few decreased the incentive for entrepreneurial development.
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Oct 4, 2015 16:10
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Didn't the chaebols have a stranglehold on internal markets for a long enough while to be considered to be practicing 'import substitution'? At what point were they exposed to global competition?
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Oct 4, 2015 17:54
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tekz posted:Didn't the chaebols have a stranglehold on internal markets for a long enough while to be considered to be practicing 'import substitution'? At what point were they exposed to global competition? In the export market. They very well may have remained protected at home but that doesn't help Hyundai sell Excels in the U.S. The domestic market was tiny and their growth was fueled by exports. And again, besides increasing trade in general this encouraged continued improvements because while the government may have been happy to subsidize it had every reason to want greater return and that meant industry needed to compete on the global market.
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Oct 4, 2015 19:14
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I think this will fit in here. Do gun buybacks work, or buybacks of illegal goods in general work? Is there a price point you have to hit like market value or something like that, or does making it illegal persuade people to bring it in at a discounted rate. With all of the shootings happening over here I was wondering if anyone knew much about that?
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Oct 5, 2015 00:02
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Some TFR folks have followed past attempts at gun buybacks and would know more, but like you alluded the implementation matters a lot. Past buybacks have moronically offered a flat rate exchange, allegedly leading to people abusing the system by scooping up worthless or low-value junk and exchanging it for a profit. In addition to that, the exchange rates have been low enough to not offer much incentive to anyone who thinks critically about the situation for two seconds. Even with proper incentives, the theory behind buybacks and reducing gun crime is very dubious, but that's getting off-topic.
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Oct 5, 2015 02:04
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asdf32 posted:In the export market. They very well may have remained protected at home but that doesn't help Hyundai sell Excels in the U.S. The domestic market was tiny and their growth was fueled by exports. And again, besides increasing trade in general this encouraged continued improvements because while the government may have been happy to subsidize it had every reason to want greater return and that meant industry needed to compete on the global market. Right, also the Latin Ameriican states suffered from what I called path dependency: Their bureaucratic authorities responsible for economic policies were not interested in resisting the import substitution elites, it was easier for them to approve budgets helping the import substitution industries, than to deal with the fact those industries were a drain on national welfare.
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Oct 5, 2015 02:16
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https://www.hillaryclinton.com/p/briefing/factsheets/2015/10/08/wall-street-work-for-main-street/ I read through Hillary's wall street plan and thought it was neat. Some key points to it with either questions or comments:
Overall good stuff to read I hope the other candidates have equally detailed plans to pick apart. I'd especially like to see a reasonable republican and Sanders do something like this.
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Oct 9, 2015 19:00
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This thread kind of dropped of my radar so I didn't realize anybody had responded to my posts. Apologies this is coming in late.asdf32 posted:China has sustained growth through periods of US and western recession. And at this stage the first world is diminishing in terms of its share of world consumption. The upshot here is China, like other successful industrializing nations, relied heavily on the United States (and to a lesser degree, the West in general) as a consumer of last resort. China used export oriented growth to develop rapidly, and the United States made this possible by running a gigantic trade deficit. This has continued throughout boom and bust, so bringing up US recessions is irrelevant when the US hasn't had a trade surplus since the 1970s. Without the United States acting as the buyer-of-last resort I'm not sure how successful various export oriented economies would have been. In a sense the US economy has been stimulating the rest of the global economy with its large trade deficit which is not necessarily the most balanced or desirable path for global growth. quote:So I don't think bubbles or "juicing" have played a necesary role in 3rd world export growth. Well then answer my original question: "If we imagine a world where China and the US aren't juicing their economies and buying up so much of what the rest of the world sells then what might the world economy look like right now?" quote:I also don't see why you'd associate bubbles with [long term] growth. They're inneficient and potentially destructive. Around the middle of the 1970s economic growth in the developed areas of the world slowed dramatically, and the postwar Bretton Woods system broke down. One of the responses that the share of GDP going toward financial activities began to increase significantly. Since this process of 'financialization' began some forty years ago the economy has behaved differently than it did in the past, with growth tending to produce unstable bubbles that inflate and inflate until they collapse and trigger a major crisis. As a result it's very hard to identify countries that with high growth rates that haven't experienced serious problems with bubbles. This seems to have been the case in America, Japan, the 'Asian Tigers', Southern Europe, Canada and, of course, China. Other countries that have done a bit better like Germany or Australia (which I understand may also have a pretty big housing bubble) have in large part succeeded because their economies are oriented around exporting to the bubble economies, in particular the US and China. So this comes back to my original question. Remove the US and China - both of which operate under their own rules and behave in very particular ways compared to the rest of the globe - and what would the global economy look like? How much of the current economic order is based on the very particular behaviour of these two countries, and how sustainable is this arrangement? How stable and desirable is it? asdf32 posted:Sorry I didn't help you more with this: That's a perfect example of how and why Chinese growth doesn't depend on U.S. bubbles If you actually want to have a discussion I'm afraid you're going to have to unpack statements and actually explain why you think they support the case your making.
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Oct 9, 2015 19:42
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