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August 9, 2012

Latest Posts from Economist's View

Latest Posts from Economist's View

Posted: 09 Aug 2012 12:06 AM PDT
Posted: 08 Aug 2012 01:08 PM PDT
Dani Rodrik argues that the future for developing countries is not as bright as many people believe:
No More Growth Miracles, by Dani Rodrik, Commentary, Project Syndicate: A year ago, economic analysts were giddy with optimism about the prospects for economic growth in the developing world. ... Today, such talk has been displaced by concern... Recent economic data in China, India, Brazil, and Turkey point to the weakest growth performance in these countries in years..., there are strong reasons to believe that rapid growth will prove the exception rather than the rule in the decades ahead.
To see why, we need to understand how "growth miracles" are made. Except for a handful of small countries that benefited from natural-resource bonanzas, all of the successful economies of the last six decades ... were exceptionally good at moving their labor from the countryside (or informal activities) to organized manufacturing. ...
But this time-tested recipe has become a lot less effective these days... First, technological advances have rendered manufacturing much more skill- and capital-intensive ... even at the low-quality end of the spectrum. ... Second, globalization ... has greatly increased competition on world markets, making it difficult for newcomers to make space for themselves. ...
Moreover, rich countries are unlikely to be as permissive towards industrialization policies as they were in the past. Policymakers ... looked the other way as rapidly growing East Asian countries acquired Western technologies ... through unorthodox policies such as subsidies, local content requirements, reverse engineering, and currency undervaluation. Core countries also kept their domestic markets open...
Now, however, as rich countries struggle..., they will apply greater pressure on developing nations to abide by World Trade Organization rules... Currency undervaluation à la China will not go unnoticed. Protectionism, even if not in overt form, will be politically difficult to resist.
Manufacturing industries will remain poor countries' "escalator industries," but the escalator will neither move as rapidly, nor go as high. Growth will need to rely to a much greater extent on sustained improvements in human capital, institutions, and governance. And that means that growth will remain slow and difficult at best.
Posted: 08 Aug 2012 10:09 AM PDT
Notes on the Romney campaign of falsehoods:
Clinton smacks down Romney welfare lie, by Steve Benen: Yesterday, Mitt Romney ... put a blatant, demonstrable lie about welfare reform at the center of his presidential campaign, falsely accusing President Obama of ending the work requirement in President Clinton's 1996 welfare reform law.
Clinton didn't get in front of a camera, but he did issue a statement late yesterday.
Governor Romney released an ad today alleging that the Obama administration had weakened the work requirements of the 1996 Welfare Reform Act. That is not true. [...]
The recently announced waiver policy was originally requested by the Republican governors of Utah and Nevada to achieve more flexibility in designing programs more likely to work in this challenging environment. The Administration has taken important steps to ensure that the work requirement is retained and that waivers will be granted only if a state can demonstrate that more people will be moved into work under its new approach. The welfare time limits, another important feature of the 1996 act, will not be waived.
The Romney ad is especially disappointing because, as governor of Massachusetts, he requested changes in the welfare reform laws that could have eliminated time limits altogether. ...
And, from Ezra Klein:
Economists to Romney campaign: That's not what our research says, by Ezra Klein: On Tuesday, the Romney campaign responded to the fire it's taking from economic analysts by unleashing some artillery of their own. They released a paper by four decorated economists associated with the campaign — Glenn Hubbard, Greg Mankiw, John Taylor, and Kevin Hassett — that tried to lend some empirical backing to "The Romney Program for Economic Recovery, Growth, and Jobs."
Hubbard, Mankiw, Taylor and Hassett make three main points... Each of these sections include supporting documents from independent economists. And so I contacted some of the named economists to ask what they thought of the Romney campaign's interpretation of their research. In every case, they responded with a polite version of Marshall McLuhan's famous riposte. The Romney campaign, they said, knows little of their work. Or of their policy proposals..., not one ... would sign on to the interpretation the Romney paper gave to their work. ...
So the Romney campaign has a paper that doesn't accurately reflect the conclusions of the economists they cite, and a policy platform that doesn't reflect the recommendations that follow from the analyses they use. If this is the best they can do in support of their economic plan, well, it's not likely to quiet the critics.

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