The best industrial policy, so the saying among some economists and policy makers famously used to go, is no industrial policy. But a new study from the Inter-American Development Bank (IDB) suggests it is time to think again.
Why? Well, industrial policy may not fully explain Latin America’s dramatic productivity slide over the past decades, but it could perhaps help revert it. Read more
By Mario Pezzini of the OECD
The year 2010 was a turning point. What we didn’t know at the time – but what new data just released have shown us – was that 2010 was the year when the share of non-OECD countries in the global economy surpassed that of OECD countries, at purchasing power parity. The rate of this shift has been remarkable: just 10 years earlier these countries accounted for 40 per cent of the global economy. The shift is being led by China and India, which together account for almost a quarter of the global economy. Read more
By Pablo Sanguinetti of CAF and UTDT
A long time ago, a reporter is said to have asked the Argentine writer Jorge Luis Borges, “Who is Borges?” To which the characteristically subtle answer was: “A forgotten man, from a forgotten time, from a forgotten continent”. With economic growth in Latin America having decelerated to 4.6 per cent in 2011, to 2.9 per cent in 2012, to 2.7 per cent in 2013 and with commentators dismissing the growth momentum of the preceding decade as a commodity-driven fluke, the region seems indeed to be on a path to oblivion. Read more
Will South Koreans earn higher wages than the French, Germans, Americans and Brits in twenty years or so? Perhaps, according to a study published on Thursday by professional services firm PwC. Read more
By Shaomin Li and Seung Ho Park of the Skolkovo Institute for Emerging Market Studies, Moscow
If you suggest that Egypt, Morocco, and Bangladesh could be the next bright spots for high economic growth, you might get some sceptical reactions.
But this is outcome of our recent study on productivity. We found that culture influences productivity – and that productivity flourishes among people that rate long-term financial planning, entrepreneurial risk-taking, and family values, and who, controversially, prefer political stability to political freedom. On this basis, Egypt, Morocco and Bangladesh will all do well. Read more
Well, they thought it was going to be bad. But not this bad. Consumer price inflation in Brazil was 0.88 per cent in the month to mid-January and 6.02 per cent over the previous 12 months, the IBGE, the national statistics institute, said on Wednesday.
On Monday, the central bank’s weekly survey of market economists showed inflation expectations were creeping up: the consensus for January had risen to 0.81 per cent from 0.78 per cent a week earlier. But Wednesday’s figure was off the chart. Read more
By Marcos Troyjo of Columbia University
The timid expansion of Brazil’s GDP in the past 12 months at under 1 per cent deals a hard blow to the notion that its policy makers had devised an economic model uniting high growth with social inclusion. This sweet dream is over. It is wrong to assume that the set of policies Brazil has put in place in the past few years to boost its economy and upgrade its social data are pillars of a new development model. Read more