Tag Archives: growth

The Economics Nobel Prize and Settler Mortality

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October 25, 2024 — Why have some countries grown rich and others not?   The three winners of this year’s Nobel Prize — Daron Acemoglu, Simon Johnson and Jim Robinson — offered a one-word answer: Institutions.  Specifically, “inclusive institutions,” which refers to an open society, accountable government, economic freedom, and the rule of law.

To illustrate concretely, the World Bank offers country-by-country indicators of six aspects of institutional quality: control of corruption, voice and accountability, government effectiveness, absence of violence, regulatory quality, and rule of law.  At the top of the rankings are Denmark and Finland.  At the bottom are Equatorial Guinea and South Sudan.  Across a broad set of countries, these indicators are indeed highly correlated statistically with national income per capita. read more

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Can Technology Hurt Productivity?

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March 22, 2018 —  Declining growth rates in productivity and GDP have been observed in recent years.  A variety of explanations have been offered.

The most prominent explanations involve technology.   On the one hand, Robert Gordon (2016) has argued persuasively that we should not expect Information and Communications Technology (ICT) and other technological innovations of recent years to have as big an economic payoff as electricity, the automobile, and other technological revolutions of the past.   On the other hand, Martin Feldstein (2017) has argued persuasively that productivity growth is higher than we realize, because government statistics “grossly understate the value of improvements in the quality of existing goods and services” and “don’t even try to measure the full contribution,” of new goods and services, and that these measurement errors are probably becoming more important over time. read more

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China’s Slowdown

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(Jan. 22, 2016) Investors worldwide are closely watching the steep decline in China’s stock market. The Shanghai Stock Exchange Composite Index is down more than 40% since June 2015.

The reason observers are concerned is not because they themselves are invested: China’s stocks are overwhelmingly held by Chinese themselves.  Rather, many are interpreting it as evidence that China’s economy is going down the tubes.

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