global financial crash yay!
- Thread starter sufi
- Start date
Mr. Tea
Let's Talk About Ceps
Jesus...I mean, to me, a billion dollars is conceptually quite close to being an effectively infinite amount of money. But a trillion - or nine trillion - dollars? 10^13 green ones? That's like Cantor's aleph-one or something.
So how much money actually is there in the world? I should imagine $9 tril represents a fair chunk of it.
Sorry, there's a reason I don't usually contribute to economics threads as you can no doubt appreciate, I just couldn't let that go uncommented-on.
vimothy
yurp
padraig (u.s.)
a monkey that will go ape
nice one - you saw the great article he did a few months back on the (utterly insane) Icelandic banking bubble? and this one from last November - "The End of Wall Street's Boom"? including this great paragraph re: Liar's Poker:
great writer, of course. & his sports books ain't half bad either.
great writer, of course. & his sports books ain't half bad either.
padraig (u.s.)
a monkey that will go ape
from TNR, on deglobalization & it's impacts
The World Is Bumpy
turns out developing nations exposing themselves to (nominally) free trade & switching over to export economies wasn't the best idea after all...right fooking shocked I am, I tell ya...
The World Is Bumpy
turns out developing nations exposing themselves to (nominally) free trade & switching over to export economies wasn't the best idea after all...right fooking shocked I am, I tell ya...
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hucks
Your Message Here
Just found out he wrote Moneyball - makes sense now...
vimothy
yurp
On the contrary, I think they did pretty well out of it, regardless of constraints imposed by geography or history.
padraig (u.s.)
a monkey that will go ape
that deserves a real answer but don't have time to get into it right now but - mixed results is far more accurate I'd think. really depends on the country. and who you're talking about doing "pretty well".
vimothy
yurp
Well, I haven’t had time to read it but I'm assuming that the TNR article is referring to China and the four Asian Tigers. Hard to imagine how China could have achieved similar growth rates absent its export led growth model -- even if as it turns out the resultant macro imbalances have been harmful for the global economy as a whole (though on balance probably not to China’s economy), and despite the fact that it has built up a potentially dangerous exposure to the dollar -- and bearing in mind the fact that historically and geographically, China was better positioned than its Asian neighbours.
At least, that’s my reading. It seems like a no-brainer. You can dawdle along at 4% or grow at around 10% per year, but there is downside exposure to a contraction in global demand (plus foreign exchange reserve risk, natch). Oh yeah – and where might that leave us? 8% per year. Ah. Still, it doesn’t sound that bad.
And obviously there are problems, pretty definite problems (Americans don’t save enough; Chinese save too much; RMB is undervalued, yadda yadda yadda), but I fail to see why you would be so condescending about a development model that has delivered almost unprecedented growth rates, is an indigenous policy choice, and has such tight historical and geographical causal determinants. Are the policy wonks in the PRC are just not as smart as you – what gives?
At least, that’s my reading. It seems like a no-brainer. You can dawdle along at 4% or grow at around 10% per year, but there is downside exposure to a contraction in global demand (plus foreign exchange reserve risk, natch). Oh yeah – and where might that leave us? 8% per year. Ah. Still, it doesn’t sound that bad.
And obviously there are problems, pretty definite problems (Americans don’t save enough; Chinese save too much; RMB is undervalued, yadda yadda yadda), but I fail to see why you would be so condescending about a development model that has delivered almost unprecedented growth rates, is an indigenous policy choice, and has such tight historical and geographical causal determinants. Are the policy wonks in the PRC are just not as smart as you – what gives?
padraig (u.s.)
a monkey that will go ape
no, actually to seriously messed-up, or at least struggling, developing countries. i.e. Cambodia, Haiti, Mozambique, etc. places where the economy has transitioned from subsistence agriculture almost entirely to export (Cambodia - something like 1/2 the work force is in the garment industry). not that subsistence agriculture is, yunno, great but at least you can (dependent on the weather) be reasonably certain of feeding yourself regardless of how much junk Americans etc. are or aren't buying.
your arguments would, I'm sure, be quite sound if the article were referring to Brazil, India & China - in fact the point is made that all 3 of those countries will largely be able to weather the storm or even continue growing. but it's not, it's referring to countries much closer to the edge of the precipice for whom globalization has, again, been a mixed blessing.
so, perhaps read the article perhaps (& if you still think it's bollocks then fair play)
"indigenous policy choice" is a dubious one at best mate. what about the loads & loads of countries that have been pressured or outright forced into IMF restructuring programs?
the growth rates I can't speak to cos I dunno, but are you referring to only Ch/Br/Ind etc. or generally everywhere?
vimothy
yurp
Ah, just ignore me. I don't know where that came from -- think that was an ideological spasm. Excuse me while I kick that part of me to death quietly. I don't want to defend anyone's growth model. I will say though that trade is not the problem; the problem (for some Asian countries at least) has been an unbalanced overreliance on trade (Cambodia is a good example of that), and a failure to develop internal markets and social institutions. There's no reason per se why exposure to the global economy must be bad.
Ah yes, Krugman showed that chart at his LSE lectures.
There's another simpler and more up-to-date version here.
Interesting to see that since the peak at the end of last year the balance sheet has fallen slightly, perhaps a reflection of the FED's exit strategy?
There's another simpler and more up-to-date version here.
Interesting to see that since the peak at the end of last year the balance sheet has fallen slightly, perhaps a reflection of the FED's exit strategy?
vimothy
yurp
Bill Gross on the "new normal".
vimothy
yurp
Also, this just in: Institutions Versus Policies: A Tale of Two Islands, Peter Blair Henry and Conrad Miller
Abstract
Recent work emphasizes the primacy of differences in countries’ colonially-bequeathed property rights and legal systems for explaining differences in their subsequent economic development. Barbados and Jamaica provide a striking counter example to this long-run view of income determination. Both countries inherited property rights and legal institutions from their English colonial masters yet experienced starkly different growth trajectories in the aftermath of independence. From 1960 to 2002, Barbados’ GDP per capita grew roughly three times as fast as Jamaica’s. Consequently, the income gap between Barbados and Jamaica is now almost five times larger than at the time of independence. Since their property rights and legal systems are virtually identical, recent theories of development cannot explain the divergence between Barbados and Jamaica. Differences in macroeconomic policy choices, not differences in institutions, account for the heterogeneous growth experiences of these two Caribbean nations.
Recent work emphasizes the primacy of differences in countries’ colonially-bequeathed property rights and legal systems for explaining differences in their subsequent economic development. Barbados and Jamaica provide a striking counter example to this long-run view of income determination. Both countries inherited property rights and legal institutions from their English colonial masters yet experienced starkly different growth trajectories in the aftermath of independence. From 1960 to 2002, Barbados’ GDP per capita grew roughly three times as fast as Jamaica’s. Consequently, the income gap between Barbados and Jamaica is now almost five times larger than at the time of independence. Since their property rights and legal systems are virtually identical, recent theories of development cannot explain the divergence between Barbados and Jamaica. Differences in macroeconomic policy choices, not differences in institutions, account for the heterogeneous growth experiences of these two Caribbean nations.