Archive for the ‘Growth and development’ Category

The opposite of populist nationalism is not globalist elitism; it is economic realism.

June 27, 2018

Hard hitting piece by Anatole Kaletsky.

He says populist waves usually meet with economic realism which is usually unpleasant



Getting to Denmark: The role of elites in development

June 15, 2018

A group of scholars (Peter Jensen, Markus Lampe, Paul Sharp, Christian Skovsgaard) try figure the history behind the Dane model. The picture is hardly as rosy as it sounds.

There is this belief that Denmark grew via cooperating peasants. It misses the role of elites in the process:

How governments pass off politics as economics…

May 31, 2018

Interesting piece by Puja Mehra. She questions the recent government’s economic policies and says much is just politics.


We voted to keep the bullet train out: Palghar tribals

May 29, 2018

The usual research on infrastructure projects keep the crucial human displacement factor out of their analysis. Most are not even aware of any such issue.

Yesterday there was bypoll in Palghar and this piece says tribals of the region voted to keep Bullet train out:


Why dictators love development statistics?

April 27, 2018

Alex Galdstein of Oslo Freedom Forum in New Republic has an interesting piece. The usual feeling is dictators dislike all development stats but actually they like these numbers as they can be spinned to suit the regime. More importantly, the regime itself produces these stats:

Exchanges at the Organization of American States usually don’t do well on YouTube. But when the Honduran Minister of Foreign Affairs brought up Venezuela’s crackdown on dissent last summer, Venezuelan representative Delcy Rodríguez scored surprise points with a rebuttal citing the United Nations’ 2016 Human Development Index, which ranks Venezuela 59 spots higher than Honduras. Crackdown or no crackdown, “Venezuela does not demonstrate such terrifying statistics,” she said, in an exchange that soon went viral on Spanish-speaking social media. It was a win for the Maduro regime, and the key to victory was trusted U.N. data.

For those of us working to advance human rights, such episodes are becoming frustratingly familiar. From the development initiatives of Jeffrey Sachs and Bill Gates, to Tony Blair’s despotic partnerships or Tom Friedman championing Chinese autocracy in The New York Times, the last two decades have seen political concerns repeatedly sidelined by development statistics. The classic defense of dictatorship is that without the messy constraints of free elections, free press, and free protests, autocrats can quickly tear down old cities to build efficient new ones, dam rivers to provide electricity, and lift millions out of poverty.

The problem with using statistics to sing the praises of autocracy is that collecting verifiable data inside closed societies is nearly impossible. From Ethiopia to Kazakhstan, the data that “proves” that an authoritarian regime is doing good is often produced by that very same regime.


On Roman roads and the sources of persistence and non-persistence in development

April 10, 2018

Carl-Johan Dalgaard, Nicolai Kaarsen, Ola Olsson and Pablo Selaya research on the topic: Do roads matter?


The Guatemalan economic miracle and the man who helped it happen: Manuel Ayau

March 20, 2018

Interesting article and had no idea about this. We barely know anything about small economies, leave people who tried shaping/changing them.

It talks about Manuel Ayau who believed in free and prosperous Guatemala:


Comparing Japan’s Lost Decade with the U.S. Great Recession

March 7, 2018

Guillaume Vandenbroucke of St Louis Fed has a nice piece.

He says that in Japan growth rate of GDP per capita slacked whereas in US the levels of GDP per capita declined:

Japan’s economy began its “Lost Decade” in the 1990s, with persistent slow growth and low inflation. One could argue, however, that the Lost Decade has persisted for nearly three decades.

In 2008, the United States entered into what is now called the “Great Recession.” The Great Recession was also characterized by slow growth and low inflation. These similarities between the Lost Decade and the Great Reces­sion have led many analysts to wonder whether the United States is in for the same persistent economic slump as Japan. 

In this analysis it is critical to draw a distinction between a change in the growth rate of gross domestic product (GDP) per capita and a change in its level. For instance, a country can experience a sudden decline in the level of its GDP per capita after a major recession, but its growth rate can remain constant. Conversely, a country’s rate of growth can decline without any sudden drop in the level of its GDP per capita. The Japanese data reveal that the Lost Decade is clearly a case of slow growth rather than of a sudden negative shock to GDP per capita. The U.S. data, slightly varied, reveal that the Great Recession is the opposite case.

The difference is that Japan will take much longer to double its income compared to US:


Why Greece is banking on China’s modern-day Silk Road to help its economic recovery

December 27, 2017

Interesting bit of news.

How one of the Greek ports which was used in earlier Silk Road is going to be used again in the modern day silk road:

Greece hopes to transform its ancient port of Piraeus into the entry point for an extensive network of roads and railways that will allow China to penetrate into the heart of Europe, its ambassador to Beijing has said.

China’s ambitious push to build a modern-day Silk Road through Asia and Europe has suffered a number of rebuffs in recent weeks after Pakistan, Myanmar and Nepal cancelled put on hold a number of major infrastructure projects funded by Chinese investment.

But Greece, a key point along the route of the ancient Silk Road, will once again serve as the hub connecting Asia, Europe and Africa, according to Leonidas C Rokanas.

“Eventually, Piraeus will become the main entry point for Chinese exports to southern, eastern and central Europe,” Rokanas told the South China Morning Post. “To use a Chinese metaphor, Piraeus will form the “head of the dragon” of the so-called land-sea express route, leading to the heart of Europe through Greece.”


This is a superb visual explainer of what the modern day Silk Road (called One Belt One Road) is proposing to do..

The changing geography of US manufacturing during the 20th century

December 13, 2017

Fascinating research by Profs Nicholas Crafts and Alex Klein.

They look at how economic geography has changed in US manufacturing from 1880-1997:

Religious faith can help people to build better cities?

December 12, 2017

Prof. Chris Ives and and PhD candidate Andre Van Eymeren think so and here is how.


Does finance lead to economic growth? Summary of literature…

December 12, 2017

Alexander Popov of ECB looks at the biggest question on finance: does it lead to economic growth and if yes how?

He sums up the literature so far:

This paper reviews and appraises the body of empirical research on the association between financial markets and economic growth that has accumulated over the past quarter-century. The bulk of the historical evidence suggests that financial development affects economic growth in a positive, monotonic way, yet recent research endeavors have provided useful and important qualifications of this conventional wisdom. Moreover, the proliferation of micro-level datasets has enabled researchers to study more precise links between theory and measurement. The paper highlights the mechanisms through which financial markets benefit society, as well as the channels through which finance can slow down long-term growth. 

Nice bit..

The Great Enrichment Was Built on Ideas, Not Capital

November 27, 2017

Deirdre N. McCloskey writes on how much ideas mattered in history of economic development:

The commercial bourgeoisie — the middle class of traders, inventors, and managers, the entrepreneur and the merchant, the inventor of carbon-fiber materials and the contractor remodeling your bathroom, the improver of automobiles in Toyota City and the supplier of spices in New Delhi — is, on the whole, contrary to the conviction of the “clerisy” of artists and intellectuals, pretty good.

Further, the modern world was made not by material causes, such as coal or thrift or capital or exports or exploitation or imperialism or good property rights or even good science, all of which have been widespread in other cultures and other times. It was made by ideas from and about the bourgeoisie — by an explosion after 1800 in technical ideas and a few institutional concepts, backed by a massive ideological shift toward market-tested betterment, on a large scale at first peculiar to northwestern Europe.


The origins of industrial revolution in UK and why the industrial revolution did not happen in Rome?

November 22, 2017

Just like Great Depression remains the holy grail for macroeconomics, industrial revolution is the grail for growth economics.

Two pieces on industrial revolution.


A Tale of Two Cities: Why Hamburg succeeded and Lübeck declined?

November 17, 2017

Nice post by Prateek Raj.

The German cities of Hamburg and Lübeck have an interwoven and eventful history. Whereas Lübeck offers an example of how dominant cities may become unattractive and decline when they end up serving the interests of a privileged few and refuse to change, Hamburg serves as a tale of how cities can reinvent themselves by changing with the times.


The deeply held religious convictions that kickstarted capitalism

November 13, 2017

A video which explains how Calvinism led to capitalism:


Origins of economic divide between North Italy and South Italy…

November 6, 2017

Most countries/regions/cities are developed in a lopsided manner with one part having higher/better economic part than the other. In India, one often sees Southern part more developed than Northern (South India vs North India, South Mumbai vs North Mumbai. South Delhi vs North Delhi) and even West being more developed than East (Western India vs Eastern India). There are all kinds of possibilities here.

In Italy, North Italy is more developed than South Italy. Giovanni Federico, Alessandro Nuvolari and Michelangelo Vasta investigate and find:


Finland thinks it has designed the perfect school: This is what it looks like….

November 2, 2017

Adam Jezard provides a glimpse of Finland schools. What is seen as a modern school looks more like India’s gurukul of yesteryears minus all today;s technology:


Missed Opportunities: The Economic History of Latin America

October 6, 2017

There is a new book on Latin America by Beatriz Armendáriz and Felipe Larraín.

IMF interviews Prof Larrain. What sums up the missed opportunities in the region?

Latin America has vast natural resources and a talented population. Why has the region remained so poor compared with its northern neighbors?

Our book highlights five theories of why Latin America has lagged behind, some of which date back to the region’s colonial origins.

The first is geography. Over 70 percent of Latin America is in the tropics, which makes everything more difficult. The region is more exposed to disease—malaria, yellow fever, dengue, cholera, and others—and it is far from key markets.

Second, Latin America was exposed to civil law tradition after independence, as opposed to common law. A common law system—where judges have a more active role—is more conducive to economic growth and development.

Third is large-scale agricultural plantations in Latin America. In the North, there was more mixed farming centered on grains and livestock, and smaller units, which led to more democratic political institutions, a more robust protection of property rights, and a larger middle class.

Fourth, the region’s institutional legacy is a part of the story too, where institutional arrangements in the South are weaker as opposed to the North.

And finally, ethno-linguistic and cultural fragmentation in Latin America, which goes back to the colonial periods, have also held back the region, although the influence of this factor is much less important than in Africa, for example.

Hmm… How these factors continue to impact the region..


20th Anniversary of British transferring Hong Kong to China: Remembering John Cowperthwaite’s role in shaping the island

July 3, 2017

On 20th anniversary of Hong Kong, Neil Monnery has a nice piece on role of John Copwerwaithe in shaping the island economy:

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