tag:blogger.com,1999:blog-19949676.post114362996519138341..comments2024-03-19T11:14:28.872+00:00Comments on demography.matters.blog: Economic Growth In The OCEDUnknownnoreply@blogger.comBlogger23125tag:blogger.com,1999:blog-19949676.post-1144308168063878812006-04-06T07:22:00.000+00:002006-04-06T07:22:00.000+00:00"well, that's scarcely a scientific measurement, i..."well, that's scarcely a scientific measurement, is it now?"<BR/><BR/>No it isn't, but then I don't think I ever suggested that it was. I think what I am suggesting is that we are in an area where the 'scientific' interpretations (for methodological measurement issue reasons, and this is *known problem*) are problematic.<BR/><BR/>"And there's a reason why "anecdotal evidence" is a polite synonym Edward Hughhttps://www.blogger.com/profile/10384039867580949531noreply@blogger.comtag:blogger.com,1999:blog-19949676.post-1144306274657065052006-04-06T06:51:00.000+00:002006-04-06T06:51:00.000+00:00"The Japanese ran into the limits of their model, ..."The Japanese ran into the limits of their model, but weren't able to reform it because of the way it's locked in with so many vested interests."<BR/><BR/>They ran into the limits of their model in part for demographic reasons, this has always been the unrecognised sub-agenda for the Japanese problem. Now they have carried out considerable reform, but they are still not out of the woods, and theyEdward Hughhttps://www.blogger.com/profile/10384039867580949531noreply@blogger.comtag:blogger.com,1999:blog-19949676.post-1144305929787088882006-04-06T06:45:00.000+00:002006-04-06T06:45:00.000+00:00"Also, China is dangerously overconcentrated on ma..."Also, China is dangerously overconcentrated on manufacturing, which is increasingly commoditized and is turning into a low-return sector.<BR/><BR/>It can't _afford_ to revalue its currency much. The resulting crunch on the export sector would produce instant mass unemployment -- in a society with no safety net.<BR/><BR/>They're in the position of a man running downhill; they have to keep going Edward Hughhttps://www.blogger.com/profile/10384039867580949531noreply@blogger.comtag:blogger.com,1999:blog-19949676.post-1144305741839641202006-04-06T06:42:00.000+00:002006-04-06T06:42:00.000+00:00"We know that now. Most people didn't think so at ..."We know that now. Most people didn't think so at the time."<BR/><BR/>Well it is hard to speak for most people, but I certainly think anyone who was thinking about the situation and knew some economic theory was aware that not only didn't the centrally planned economy not work, but also the reality behind the numbers was very different (the military sector being one possible exception). I Edward Hughhttps://www.blogger.com/profile/10384039867580949531noreply@blogger.comtag:blogger.com,1999:blog-19949676.post-1144296891002991292006-04-06T04:14:00.000+00:002006-04-06T04:14:00.000+00:00"Nope. Japan's problem was, and is demographic, th..."Nope. Japan's problem was, and is demographic, that is what this whole blog is about in a way. At least this is my big bet :)."<BR/><BR/>-- there's certainly a demographic problem there, particularly in the long run, but that wasn't why the bubble burst.<BR/><BR/>The Japanese ran into the limits of their model, but weren't able to reform it because of the way it's locked in with so many vested Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-19949676.post-1144296477172509372006-04-06T04:07:00.000+00:002006-04-06T04:07:00.000+00:00"Well I thiunk this doesn't help us, since the who..."Well I thiunk this doesn't help us, since the whole model there was bad."<BR/><BR/>-- We know that now. Most people didn't think so at the time.<BR/><BR/>Ditto China. People look at all the skyscrapers in Shanghai -- as they did at the steel mills of Magnitogorsk in 1950 -- and go all oooh and ahhhh.<BR/><BR/>The thing to do is look at how efficiently resources are allocated, which is best Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-19949676.post-1144296174054234592006-04-06T04:02:00.000+00:002006-04-06T04:02:00.000+00:00"All I can tell you is that I watch a hell of a lo..."All I can tell you is that I watch a hell of a lot of movies from the US, and what I see doesn't look one hell of a lot different from what I see here, including the variability."<BR/><BR/>-- well, that's scarcely a scientific measurement, is it now? And there's a reason why "anecdotal evidence" is a polite synonym for "utterly worthless."Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-19949676.post-1144235995863934292006-04-05T11:19:00.000+00:002006-04-05T11:19:00.000+00:00"As I mentioned, the USSR managed 50 years of fast..."As I mentioned, the USSR managed 50 years of fast growth by sectoral shifts."<BR/><BR/>Well I thiunk this doesn't help us, since the whole model there was bad. We don't even know how much growth there really was. I am talking about relatively open, free market economies, just like China will probably be 20 years from now.<BR/><BR/>"Japan ran over a related precipice decade ago."<BR/><BR/>Nope. Adminhttps://www.blogger.com/profile/07431230172942198078noreply@blogger.comtag:blogger.com,1999:blog-19949676.post-1144235431939671522006-04-05T11:10:00.000+00:002006-04-05T11:10:00.000+00:00"That doesn't say anything about the Gini coeffici..."That doesn't say anything about the Gini coefficients, of course."<BR/><BR/>Or PPPs, or big Mac indexes :). Fraid I still don't buy it, relative values of the currencies matter here and Europe in general isn't living anywhere near as badly as you seem to be thinking, but then again, perhaps neither is Memphis :).<BR/><BR/>All I can tell you is that I watch a hell of a lot of movies from the US, Adminhttps://www.blogger.com/profile/07431230172942198078noreply@blogger.comtag:blogger.com,1999:blog-19949676.post-1144231394497826432006-04-05T10:03:00.000+00:002006-04-05T10:03:00.000+00:00"I don't think you ever run out of new sectors to ..."I don't think you ever run out of new sectors to move into, you simply keep inventing more"<BR/><BR/>-- in theory, yes; in practice, often no.<BR/><BR/>What I said was that the _easy_ shifts get done first, eg., even a grossly inefficient factory will often outproduce a peasant farm.<BR/><BR/>As I mentioned, the USSR managed 50 years of fast growth by sectoral shifts. <BR/><BR/>But when it had Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-19949676.post-1144230314059107422006-04-05T09:45:00.000+00:002006-04-05T09:45:00.000+00:00"European living standards are generally much high..."European living standards are generally much higher than you seem to be imagining, and if the figures are showing Paris as being like Memphis, then there's simply something wrong with the numbers."<BR/><BR/>-- nope, not if you're talking per-capita incomes. People in the more affluent parts of Europe are equivalent to the poorer parts of the US.<BR/><BR/>That doesn't say anything about the GiniAnonymousnoreply@blogger.comtag:blogger.com,1999:blog-19949676.post-1144229617236580752006-04-05T09:33:00.000+00:002006-04-05T09:33:00.000+00:00Even another 20 years of high growth will not put ...Even another 20 years of high growth will not put China anywhere near where Germany or Japan today.<BR/><BR/>China will get old long before it gets rich. It's already aging rapidly and the dependency ratio is starting to go up again.<BR/><BR/>And since the fall in China's TFR was so ver swift, the very same huge age-cohorts that fueled growth during the surge will act as an anchor around the neckAnonymousnoreply@blogger.comtag:blogger.com,1999:blog-19949676.post-1144222149591121922006-04-05T07:29:00.000+00:002006-04-05T07:29:00.000+00:00"Hence the most prosperous parts of Europe (leavin..."Hence the most prosperous parts of Europe (leaving aside tiny enclaves like Luxembourg) are now in about the same place as the poorest parts of the US; Sweden or Norway, France or Germany rank with Mississipi or New Mexico or Louisiana or Arkansas."<BR/><BR/>Uff, this is way off beam. I don't know if you've visited any of these places you mention recently, but the comparison simply isn't valid. Edward Hughhttps://www.blogger.com/profile/10384039867580949531noreply@blogger.comtag:blogger.com,1999:blog-19949676.post-1144221829642261402006-04-05T07:23:00.000+00:002006-04-05T07:23:00.000+00:00"Economic growth can come either from sectoral shi..."Economic growth can come either from sectoral shifts in the factors of production, or from increasing the Total Factor Productivity (TFP) with which each unit of input is used."<BR/><BR/>Again I think you are partly right, but you are oversimplifying.<BR/><BR/>Economic growth - per se - can come from a variety of sources, it can simply come from having a growing population and thus more people Edward Hughhttps://www.blogger.com/profile/10384039867580949531noreply@blogger.comtag:blogger.com,1999:blog-19949676.post-1144219983920748502006-04-05T06:53:00.000+00:002006-04-05T06:53:00.000+00:00"Note in the growth tables that all the significan..."Note in the growth tables that all the significant countries to the right of the US are in "catch-up" mode."<BR/><BR/>Oh yes, very much so. The US is, as we've been discussing, some sort of hybrid, betwenn a developed and a developing society. Fascinating really.<BR/><BR/>I have a table of median ages here:<BR/><BR/>http://www.edwardhugh.net/medianage.html<BR/><BR/>and you can see that the US - Edward Hughhttps://www.blogger.com/profile/10384039867580949531noreply@blogger.comtag:blogger.com,1999:blog-19949676.post-1144219556428539232006-04-05T06:45:00.000+00:002006-04-05T06:45:00.000+00:00"Given that China's per-capita GDP will still be m..."Given that China's per-capita GDP will still be much less than that of the US2<BR/><BR/>Well this depends on how much you mean by much. In real terms I imagine come 2025 GDP per capita in China will be much (and by some order of magnitude much) bigger than people are currently contemplating.<BR/><BR/>We don't really know what the relative realignements will look like if we hit global deflation, Edward Hughhttps://www.blogger.com/profile/10384039867580949531noreply@blogger.comtag:blogger.com,1999:blog-19949676.post-1144219329932876712006-04-05T06:42:00.000+00:002006-04-05T06:42:00.000+00:00"not necessarily, and more probably India than Chi..."not necessarily, and more probably India than China."<BR/><BR/>Well I picked 20 years very intentionally and in a minute I will explain why.<BR/><BR/>"China is headed full-tilt for a demographic brick wall and will go _splat_ fairly soon".<BR/><BR/>Not so simple. I think the time scale here is very important. My guess, and it is a guess, is that China will peak in about 20 years (give or take 5 Edward Hughhttps://www.blogger.com/profile/10384039867580949531noreply@blogger.comtag:blogger.com,1999:blog-19949676.post-1144206778335076942006-04-05T03:12:00.000+00:002006-04-05T03:12:00.000+00:00Another thing which has to be kept in mind is the ...Another thing which has to be kept in mind is the magic of compound interest.<BR/><BR/>The difference between 1% growth and 3.5% may not be significant in any one year, but it adds up.<BR/><BR/>From 1945 through about 1980-85, the other developed countries were growing faster than the US, on average -- hence they were catching up in terms of per-capita GDP.<BR/><BR/>This process stopped a Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-19949676.post-1144206330572719392006-04-05T03:05:00.000+00:002006-04-05T03:05:00.000+00:00Economic growth can come either from sectoral shif...Economic growth can come either from sectoral shifts in the factors of production, or from increasing the Total Factor Productivity (TFP) with which each unit of input is used.<BR/><BR/>Countries like China are shifting factors of production -- taking peasants from the fields and putting them in factories.<BR/><BR/>Given reasonable macroeconomic management, this is the "easy" route to economic Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-19949676.post-1144206022633877142006-04-05T03:00:00.000+00:002006-04-05T03:00:00.000+00:00Note in the growth tables that all the significant...Note in the growth tables that all the significant countries to the right of the US are in "catch-up" mode.<BR/><BR/>That is, they're either post-Communist or are developing countries.Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-19949676.post-1144205947685239502006-04-05T02:59:00.000+00:002006-04-05T02:59:00.000+00:00"Exactly, which is why 20 years from now both Chin..."Exactly, which is why 20 years from now both China and India will be forces to be reckoned with."<BR/><BR/>-- not necessarily, and more probably India than China.<BR/><BR/>China is headed full-tilt for a demographic brick wall and will go _splat_ fairly soon.<BR/><BR/>The huge increase in working-age population as China moves through the demographic 'sweet spot' is about to come to an end. The Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-19949676.post-1144068856336943352006-04-03T12:54:00.000+00:002006-04-03T12:54:00.000+00:00"the US has high growth rates from a high base"Whi..."the US has high growth rates from a high base"<BR/><BR/>While I agree with your sentiments, some qualifications may be in order. I think we need to differentiate intensive from extensive growth here.<BR/><BR/>By this I mean what you can do with the same population, and what you can do with an increasing one. Germany and Japan may only be able to have averaged 1% growth p.a. over the last decade Edward Hughhttps://www.blogger.com/profile/10384039867580949531noreply@blogger.comtag:blogger.com,1999:blog-19949676.post-1143950859369979132006-04-02T04:07:00.000+00:002006-04-02T04:07:00.000+00:00Hans, that's fairly simple: growth rates say noth...Hans, that's fairly simple: growth rates say nothing about where you are, merely where you're going. China has very high growth rates, from a very low base.<BR/><BR/>Now, the US has high growth rates from a high base; consequently, people from everywhere want to come and work here. 400,000 European scientists and technologists, for instance.Anonymousnoreply@blogger.com