By Thomas Palley
The last quarter of the 19th century witnessed a period of sustained global deflation. In the 1896 US presidential election, William Jennings Bryan famously attacked the gold standard as the cause of deflation, declaring “You shall not press upon the brow of labour this crown of thorns. You shall not crucify mankind upon a cross of gold.” Read more
By Roger E.A. Farmer
For the past nine months I have been presenting some new ideas at academic conferences where economists have been grappling with the current financial crisis. Boston, Montreal, Amsterdam, London, Cleveland, Sydney, Atlanta … Only the venues change. The participants and the papers are always the same. Read more
As part of the FT’s week-long series on the Brics emerging markets, experts on each of the four economies will contribute to the debate about the role of Brics consumers in the global economy. Today’s entry focuses on India, check back throughout this week for entries from the other countries.
By Suhel Seth
Much has been made of India’s brisk economic march and that in the global comity of economic superpowers, India is inching towards the high table but the fact is that there are two Indias and both shall remain for a long time to come. One which still experiences the ravages of poverty and poor infrastructure while the other that sees luxury brands tempting the now-rich-and-arrived Indian. But brands in India, more than the politician ironically, have understood the power that both these Indias possess in their own unique way.
Much of what happened in 2009 in the world economy escaped India only because while one part had become dysfunctional (no de-coupling here), the other was happily untouched by the global meltdown, which is what continued to propel India’s almost 8 per cent GDP growth.
But the real story of India and the brands within is in effect the story of the quintessential Indian consumer and the DNA which remains largely unaltered. So while on the one hand, 185 Bentleys were sold in 2009 in India, the country also witnessed the launch, and then the delivery of the Nano: a $2500 car from the house of Tatas. From October, 2009 to January 2010, the Tatas have already sold more than 16,500 Nanos: in a country, which also boasts of the world’s largest two-wheeler population. Read more
As part of the FT’s week-long series on the Brics emerging markets, experts on each of the four economies will contribute to the debate about the role of Brics consumers in the global economy. Today’s entry focuses on Brazil, check back throughout this week for entries from the other countries.
By Arminio Fraga
Brazil is thought to be the most western of the Brics—a democracy full of life, an open society, porous to global fads and tastes.
One feature that supports this view is that Brazil’s consumer seems to be totally American, and I mean this neither as an insult nor as compliment, even after the global economic mess we are still digesting. Brazilian households like to buy the newest gadget and prefer to spend on items that will enhance their short-term wellbeing rather than save for a rainy day. This partly explains Brazil’s low saving rate – which has fluctuated around 17 per cent of GDP over the last decade, a number that contrasts sharply with China’s 45-50 per cent.
This massive discrepancy is also driven by the difference between the social safety nets in the two nations: Brazil’s being extensive in coverage (universal health care, education and social security) and extravagant (early retirement with full pay, for example), whereas China’s is very modest. Read more