Source: Revisiting poverty reduction in India with 60 years of data | VOX, CEPR’s Policy Portal
Thinking about The Great Leap Forward | Econbrowser
19 Apr 2016 Leave a comment
in applied price theory, applied welfare economics, comparative institutional analysis, development economics, economic growth, economic history, growth disasters, industrial organisation, law and economics, Marxist economics, Public Choice, rentseeking Tags: China, economics of planning, extreme poverty, famine, Great Leap Forward
P.T. Bauer on @BernieSanders extending #fightfor15 to entire Third World!
19 Apr 2016 Leave a comment
in applied welfare economics, behavioural economics, constitutional political economy, development economics, economic history, growth disasters, growth miracles, P.T. Bauer, politics - USA, Public Choice Tags: 2016 presidential election, antiforeign buyers, George Orwell, living wage, rational irrationality, The fatal conceit, The pretense to knowledge
India tried that in the 1950s as part of its five-year plans. It did not work that well. Bauer said that in development economics there is a “need to restate the obvious.”
Source: Ending the Race to the Bottom – Bernie Sanders.
Source: Indian Economic Policy and Development – P. T. Bauer (1959) – Google Books
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Walter Block defends multinational corporations in developing countries
18 Apr 2016 Leave a comment
in development economics, growth disasters, growth miracles, industrial organisation, international economics, labour economics, labour supply Tags: foreign direct investment, foreign investment, multinational corporations, Walter Bloch
18.1% of all children born on this planet in 1960 died before they could celebrate their fifth birthday
18 Apr 2016 Leave a comment
in development economics, economic history, health economics Tags: infant mortality, The Great Escape
The future should sue today’s climate activists for slowing The Great Escape
16 Apr 2016 Leave a comment
in development economics, economic history, economics of media and culture, energy economics, environmental economics, global warming, growth miracles, law and economics Tags: climate activists, climate alarmism, extreme poverty, The Great Enrichment, The Great Escape, vexatious litigation
Will the population bomb prevent the great stagnation?
16 Apr 2016 Leave a comment
in applied price theory, development economics, economic growth, industrial organisation, P.T. Bauer, population economics Tags: doomsday prophecies, endogenous growth theory, pessimism bias, population bomb
If only Paul Ehrlich had been right! Population explosion would have meant an explosion in people who could invent new technologies and populate in much larger markets to provide an incentive to invent new products.
Among Paul Ehrlich’s many analytical errors, he did not take into account that more people meant more inventors and more untapped markets.
Jones argued that in the very long run the only way to have further innovation is to have more people. If there are more people undertaking R&D and more people to populate the markets for those inventions, there will be further growth because the decreasing returns to knowledge creation will be overcome by having more R&D workers.
Jones attributes much of the growth in the 20th century to one-off effects that cannot be repeated such as putting more people into higher education:
… growth in educational attainment, developed-economy R&D intensity, and population are all likely to be slower in the future than in the past. These factors point to slower growth in US living standards.
Second, a counterbalancing factor is the rise of China, India, and other emerging economies, which likely implies rapid growth in world researchers for at least the next several decades.
Third, and more speculatively, the shape of the idea production function introduces a fundamental uncertainty into the future of growth. For example, the possibility that artificial intelligence will allow machines to replace workers to some extent could lead to higher growth in the future.
A larger population increases the rate of technological progress by increasing the number of geniuses and other creative people.The doomsday prophecies about the population bomb never took that into account. That is why they are wrong.
@CFigueres seriously mistaken on carbon emissions and global poverty
13 Apr 2016 Leave a comment
in applied welfare economics, development economics, economic history, energy economics, environmental economics, global warming, growth disasters, growth miracles, Public Choice, rentseeking Tags: climate alarmism, extreme poverty, global poverty, The Great Escape
What undergrads and @stevenljoyce need to know about trade @GreenCatherine
12 Apr 2016 Leave a comment
in applied price theory, applied welfare economics, development economics, international economics, job search and matching, labour economics, labour supply, macroeconomics, politics - New Zealand Tags: antiforeign bias, free trade, makework bias, Paul Krugman, protectionism, tariffs, trade policy
Minister for everything Stephen Joyce wrote some nonsense in the paper today about how trade agreements and more exports will mean more jobs:
I would like to make the point that trade access is hugely important for a small country like New Zealand.
Without fair and equal trade access we can’t sell as much of our goods and we get less for them. And that means fewer jobs.
This make-work bias is as bad as those who oppose trade agreements on the grounds of an anti-foreign bias. Trade affects the composition of employment, not the number of jobs. Paul Krugman spent a good part of the 1990s trying to explain that to the general public and public intellectuals.
What will global GDP look like in 2030?
11 Apr 2016 Leave a comment
in development economics, economic growth, economics, economics of media and culture, growth disasters, growth miracles Tags: The Great Enrichment
The enormous costs of socialism in Eastern European @BernieSanders @jeremycorbyn @johnmcdonnellMP
09 Apr 2016 Leave a comment
in applied price theory, applied welfare economics, development economics, economic history, growth disasters, growth miracles, law and economics, Marxist economics Tags: 2016 presidential election, British politics, collapse of communism, economics of socialism, Leftover Left
Where are the world’s Wi-Fi networks?
09 Apr 2016 Leave a comment
in development economics, economics of media and culture Tags: digital divide, Digital poverty, international technology diffusion, technology diffusion, Wi-Fi
@BernieSanders just wants to build a different type of wall to @realdonaldtrump’s
09 Apr 2016 Leave a comment
in applied price theory, applied welfare economics, development economics, growth disasters, growth miracles, industrial organisation, international economics, labour economics, labour supply, politics - USA Tags: 2016 presidential election, antiforeign bias, economics of immigration, left-wing popularism, Mexico, NAFTA, right-wing popularism, The Great Escape, trade agreements
@JulieAnneGenter tax havens underwrite The Great Escape from extreme poverty in developing countries
08 Apr 2016 Leave a comment
in applied price theory, constitutional political economy, development economics, economic history, economics of bureaucracy, economics of crime, growth disasters, growth miracles, International law, law and economics, property rights, rentseeking
Tax havens and offshore financial centres are vital to the economic development of poor countries. There are plenty of countries, poor countries, where the ability to move funds offshore is fundamental to successful investment. That is missed in the reporting of the Panama Papers:
Consider the big names that have shown up so far on the list. With the notable exception of Iceland, these are not countries I would describe as “capitalist”: Russia, Pakistan, Iraq, Ukraine, Egypt. They’re countries where kleptocratic government officials amass money not through commerce, but through quasi-legal extortion, or siphoning off the till. This is an activity that has gone on long before capitalism, and probably before there was money.
Tax havens and offshore financial centres offer a way in which entrepreneurs can make an honest investment, secure a return and put it aside safely from the reach of the minister’s cousin who wants to muscle in once the business succeeded.
A major problem in poor countries is short time horizons for investment. Entrepreneurs must make their money quickly.
Many years ago there is a survey of entrepreneurs in Russia and Poland. It was in the early 1990s. Each was asked whether an investment project that doubled their money in two years was worth the risk. The Russian entrepreneurs mostly said no, the Polish entrepreneur said yes.
So insecure are the returns from investment in Russia at that time that the phenomenal returns were required before an investment was made. They would only invest if they could double the money in two years.
Many years ago, Mancur Olson wrote an insightful book about prosperity and dictatorships. He introduced the concept of rights intensive production.
As countries become more and more developed, investment horizons lengthen and depends more and more upon the enforcement of contract and property rights in a tolerably honest way.
Instead of being the first entrepreneur to introduce the most basic technologies and profit handsomely, entrepreneurs are introducing a product upgrade or new product that is a minor improvement on current offerings. Such investments will take time to pay off.
In many developing countries, China as an example, property rights are insecure. One way to secure your investment is to take the proceeds offshore to a tax haven. If everything goes wrong, at least you got some nest egg overseas.
As many developing countries have corrupt politicians and dishonest courts, the way to secure gains from honest investments is to move some of the profits offshore. That is why tax havens are essential to poor countries growing richer.
One of the sources of Hong Kong prosperity was investors would deal with a Hong Kong-based company with the requisite political and economic links to China. They could enforce their contracts in China against their Hong Kong assets because the contract was based in Hong Kong under British law.
If the local legal system is inadequate, entrepreneurs well look overseas for mechanisms to force contracts and secure their returns on investments against confiscation.
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