Measuring the size of an economy is difficult on so many levels. Of course, there’s always the GDP debate, which asks about the best way to measure economic and social progress. But even measuring GDP is a huge challenge. Nigeria has just experienced a vast 89% increase in GDP having ‘rebased’ its figures.read more...»
For many developing countries tourism is already a major part of their economy and a significant source of income and employment. But there is a fierce debate about the consequences of tourism - what role can tourism play in economic development? Can travel to developing countries do more harm than good?read more...»
Using pubic data from the Asian Development Bank here are some illustrations of the structural changes in output that have occurred across a selection of countries in Far East Asia, Australia and New Zealand. Consider the magnitude of the changes that have taken place over the last twenty years. Note for revision which countries appear at the top and the bottom of each individual chart and think about WHY they appear in that position.read more...»
The Gini coefficient is a commonly-used measure of income inequality that condenses the entire income distribution for a country into a single number between 0 and 1: the higher the number, the greater the degree of income inequality.read more...»
Here is a short report on the impact that the widespread uptake of mobile banking is having on Kenyan farmers. Kenya's Mobile banking system M-PESA is widely cited as an example of how mobile money transfer systems can act as a catalyst for growth and development. At least two-thirds of Kenyans use their mobile phones to pay bills, transfer money, pay salaries and now to get loans. The availability of a reliable mobile -payments platform has also spawned a host of mobile phone start-ups helping thousands who don't have bank accounts.read more...»
If you are searching for a vivid example of a country experiencing primary product dependency have a look at this short video report from the Financial Times. The lower middle income west African country is trying to modernise their economy but remains deeply at risk from outside external shocks including over-dependency on a single mineral and terrorist threats. Inequality may be the biggest risk to it's future.read more...»
This is a revealing perspective on the challenges facing China in producing enough food to feed the hundreds of millions of Chinese squeezed into their ever growing cities.
China's policy makers are trying to increase the size of farms to exploit economies of scale and get their farmers to focus on cash crops. But the reality is that China will have to import a huge amount of food in the years to come - this creates big opportunities for farmers in China's trading partners.read more...»
The new IMF report on the global economy published in April 2014 includes a focus on the currency regimes chosen by emerging market countries. An increasing number of central banks have switched from free-floating exchange rates to managed currency regimes - perhaps because they want to make more active use of the exchange rate as an instrument of monetary policy.read more...»
The new annual report from the Asian Development Bank outlines what developing Asia needs to promote inclusive growth in the years ahead. Governments in the region should tackle widening inequality that is keeping millions poor, by using fiscal policy to help close income and wealth gaps and promote more inclusive growth, says the theme chapter of Asian Development Outlook 2014. The importance of equity in shaping future growth and development continues to gain momentum across the world and not just in the fast-growing Asian region.read more...»
Paul Collier on Africa Rising
As result of China's growth we have seen a big rise in commodity prices
Consequence for Africa has been a decade of stronger terms of trade
Average sq mile of OECD - $300,000 of known sub soil natural assets in 2000
Average sq mile of Africa - $60,000
As of the Millennium, Africa had discovered a lot less!read more...»
Preferential market access to China is providing an important growth-enhancing outlet for African exporters that find it difficult to break into industrialised countries’ markets. But there remain dangers that current export structures and national capacity constraints may further entrap Africa given its comparative advantage in primary resources and China’s comparative advantage in manufacturing products.read more...»
Removing the barriers to labour market participation that women face in many parts of the world will lead to substantial productivity gains, according to research by Marc Teignier, to be presented at the Royal Economic Society’s 2014 conference.read more...»
Here's an interesting addition to the GDP debate, which has heated up a good deal over the last couple of years. Is GDP a reliable indicator of economic progress? The Social Progress Index is another attempt at capturing more measures of development, so as to be a better guide to policy making. It's what economist Diane Coyle calls a 'dashboard' approach to measurement.read more...»
The Rwandan economy comes under special focus in 2014 because it is twenty years since the genocide. This blog provides some summary growth and development data and links on Rwanda, a country that is attracting increasing interest from students and teachers as part of their development economics course.read more...»
Europe’s pre-industrial economies provide valuable insights into whether Africa’s recent economic success can be turned into sustained growth. According to research by Professors Stephen Broadberry and Leigh Gardner, to be presented at the Economic History Society’s 2014 annual conference, the European experience suggests that the more important criteria are indicators of institutional quality and structural change.read more...»
In a rather low key report on the BBC website this week, I found the shock news that China had a trade deficit of $23bn in February. This is alongside the HSBC Purchasing Managers' Index (PMI) which focuses on small privately owned businesses, and which gave a reading of 48.1 for March, compared to 48.5 in February - with any figure below 50 indicating a contraction in activity.
And today there is a forecast of the 'official' PMI, which looks at the larger state-owned factories; although this is slightly over the 'expansion' measure of 50, it is only predicted to come in at 50.3 - and is subject to a 0.3 downwards correction to allow for seasonal patterns, according to Louis Kuijs, chief China economist at the Royal Bank of Scotland.read more...»
Are you studying Mexico as one of your chosen countries of focus for the A2 growth and development paper for EdExcel? If so, this new report from McKinsey might be of particular relevance for you. Either way, there will be plenty of useful comment here on development and growth drivers and constraints.
You may be asking why what sounds like a politics question finds a place on the economics blog. The answer of course is that the issue of governance crops up a lot in economics. Governments have to address the challenges thrown up by market failure, and offer a fiscal framework that helps tackle macroeconomic problems. Regulators intervene in uncompetitive markets. Those of you looking at development economics don’t get far before asking if poor quality government holds back the weakest economies.
Hence the question (above). All rich, developed, mature economies are democracies. Ricardo Hausmann offers and insight into why this might be so on the pages of Project Syndicate.read more...»
In this new RSA Short, Kate Raworth makes a powerful argument to look beyond economic growth alone for a true measure of prosperity and progress. Read more about Kate Raworth's work and her idea of doughnut economics by clicking this link http://www.kateraworth.com and follow her on twitter @KateRaworthread more...»
I thought it worthwhile sharing my resources which I have been collecting for students (and teachers alike). I have been promoting them on Twitter (@Economics_KSF) through scoop.it but for those of you not on there, the link for the scoop.it boards are here:read more...»
The development of India, or its non-development relative to China, is an interesting topic, and one that Bob Hindle has already been blogged about in relation to its tax system.
However, there are other aspects of the Indian economy that will also impede its ability to grow, notably its lack (or should that be 'lakh'?) of coal.read more...»
Inequality is an issue that remains firmly in the spotlight of the news media and also of policy makers in different countries.read more...»
Pub economics often explains the plight of poor countries in terms of the problems posed by corruption. That approach might have some value, and to raise the quality of your analysis of this topic, it’s helpful to say why and how it might arise, and the effects it might have. Rich countries are also vulnerable of course.
The Economist has a really helpful couple of articles on this topic, which it calls ‘crony capitalism’.read more...»
On 31 January 1990, a great event took place in Pushkin Square, Moscow. A branch of MacDonald’s was opened. The same excitement was generated in Kiev on 24 May 1997, when the MacDonald’s franchise was extended to the Ukraine. The American author Thomas Friedman wrote in 1999 that no two countries with such a franchise had ever gone to war with each other. It is a striking and imaginative image, which rapidly spread to become part of the received wisdom of the chattering classes. If economic prosperity could become spread more widely across the world, liberalism and tolerance would follow.read more...»
I was delighted to give a talk to A2 economists at Wilson's School in Surrey today covering some aspects of trade and development economics. In particular we looked at the work of Hidalgo and Hausmann and their newly published Index of Economic Complexity. The slides from my talk are streamed below.read more...»
The Atlas of Economic Complexity is a new book (perfect for the coffee table) from Richard Hausmann and Cesar Hidalgo. It maps out the degree of complexity of individual economies around the world and provides a hugely visual and interesting insight into the importance of knowledge in shaping the future prosperity of countries in the global economy. I have put together a 10 question quiz on some of their key results - a useful activity I hope for students interested in the commodity composition of trade of developed and developing countries. Have a go!read more...»
Inequality might be falling between nations as a global middle class is emerging, but inequality is on the rise within nations. Quite why this is happening is a matter of debate, but the International Monetary Fund (IMF) has joined in the discussion asking if rising inequality is an obstacle to economic growth and development.read more...»
During the financial crisis, the central banks of the United States, United Kingdom and Japan created $3.7 trillion in order to buy assets and encourage investors to do the same. Michael Metcalfe from State Street argues that these same central banks print money to ensure they stay on track with their goals for global aid? Without risking inflation? A Print-Aid matching scheme could boost aid payments by up to 40% or $200 billion.read more...»
In this independent research assignment, Year 12 Economist Doug Feagin considers some of the factors influencing the macroeconomic performance of Mexico - a fascinating country and one of the MINT cluster of countries discussed by Jim O'Neill in his recent programmes for the BBC.read more...»
Economics coverage of Africa can be a bit bleak (though perhaps it shouldn't be, with incomes rising rapidly in parts of Africa). There are often bad news stories, particularly in terms of human development indicators. News of economic progress often centres on the exploitation of primary commodities, with all the risks and issues that presents.
If you hope Africa will experience development, you’re likely to want to see sustained and robust economic growth. That, in turn, will require industrialization.read more...»
Robert Peston looks at the astonishing investment in urban infrastructure in China in recent years - 30 new airports, 26,000 miles of motorways and a new skyscraper every five days have been built in China in the last five years - required viewing for those interested in a key aspect of Chinese economic growth and development. Link to How China Ruled the World (BBC World)read more...»
Here are some links relevant to the June 2014 pre-release case study on economic prospects and challenges for the countries of sub Saharan Africa.
The IMF expects seven of the world’s fastest growing countries during the next five years will be in Sub-Saharan Africa – Congo, Ethiopia, Ghana, Mozambique, Nigeria, Tanzania, and Zambia.read more...»
A new World Bank report looks at the growing scale and scope of welfare safety nets in a number of countries in sub Saharan Africa. We tend to take entitlement and access to welfare provision for granted in high income countries. What contribution can a welfare system make to promoting inclusive growth and development. Here is the World Bank's slideshow and follow this link for their latest research papers on the topic.read more...»
You all know about exploding rates of urbanisation and the growth of mega cities. There’s much to celebrate in this trend, and economists are keen to advise countries how to urbanise successfully.
After all, for most subsistence farmers, life can be so grim that even life in a slum or shanty town can be a marked improvement. I’ve reluctantly admitted this fact to myself, and come to see slums as a stepping stone on the process of development.
A new study, reported in the Economist, suggests I might be wrong, and that we shouldn’t be ready to tolerate slums, and should be more determined to see their eradication – they might even be a barrier to development.read more...»
Here is a ten question matching-pair quiz covering aspects of development economics - a short revision quiz for A2 macro students created using the free software available from Zondle. Have a go!read more...»
This is a superb article from the Economist for A2 macro students wanting to understand more about the fragility of a large cluster of emerging economies.read more...»
Natural resource economics are applied in this new World Bank blog to the Eurasian region - plenty of overlap with your studies on the issue in the context of sub Saharan Africa and other parts of the world. Click here for the blog article.
Click here for a blog article on the natural resource curse from Graham Watson (2012)
Our streamed revision presentation on the topic is belowread more...»
The BBC Africa Report looks at the importance of largely French funded infrastructure projects as a driver of growth and development in the Ivory Coast. But the economy is becoming more open to investors from other countries. Some of this investment may come from Japan - read this article
Related article - focusing on the mining boom in the Ivory Coast - Ivory Coast hopes for golden future as mining sector opened upread more...»
A great introduction to some global or development economics, looking at the world’s biggest problems, as measured by their cost to the world’s economy. There’s commentary and a good stimulus video. It will add a dimension to your introduction to global challenges, even if you’re already familiar with the basic Copenhagen Consensus idea: prioritise the world’s problems from biggest to smallest. That approach should lead to a more efficient response, given that resources – and political will – are limited.read more...»
We have spent a little time in our A2 economics lessons this week looking at some of the challenges facing the Indian economy. Growth is slowing, inflation is persistently high, interest rates are rising and the Indian current account deficit on the balance of payments is widening. The economy faces many challenges and pressures for better government and structural economic reform are growing. I have linked below to some of the charts we used in our discussions and note-taking.read more...»
Here is a short video on the challenges and opportunities facing cocoa producers across the world but especially in sub Saharan Africa which accounts for 70% of global production. Supply is struggling to keep pace with rising world demand and there have been some structural declines in production in several countries.
The FT's Emiko Terazono reports from Ghana on how chocolate manufacturers and traders are striving to boost cocoa supplies, which are coming under pressure from climate change and urbanisation amid growing demand for confectionery in emerging markets. Farmers are being encouraged to develop supplementary incomes and invest in sustainable production methods.read more...»
As the comedian Mark Steel once said, “anybody who says we’re all middle class now obviously hasn’t been to Wigan” (I can make that joke because my dad’s from there). One huge global cause for celebration is that the scourge of absolute poverty is in retreat. Instead we hear much more about rising inequality within nations, which is progress, of a sort. In amongst these discussions is talk of a rising new middle class (see above – link here). What might this mean?read more...»
My A2 macro students are now looking at some fascinating macro policy challenges facing a range of countries. This week they choose one from two set assignments.
The first offers them an opportunity to analyse some of the causes of high inflation in India and consider how much of a threat it is to India's continued growth and development.
A second assignment looks at Abenomics in Japan and whether it can lift the Japanese economy out of over two decades of slow growth and deflationary pressures. I am hoping that there will be some interesting insights allied to good A2 macro analysis as students crack on with their independent research.
Download the assignment sheet below and I have added in some suggestions for further reading on the two topicsread more...»
BBC2 are showing a documentary about the massive growth of the coffee industry in Vietnam at 8.00pm tonight - if you miss it, it will be repeated on Monday 3 Feb at 23.30, and also available on i-player. It looks as if it will provide some excellent examples of agricultural strategies to promote development, as well as constraints on that development.
I have asked my students to read this article from the BBC News Magazine which summarises some of the programme, and to look at this summary of the World Bank's development report produced last summer.read more...»
Notes from a talk given by Ricardo Fuentes-Nieva (Head of Research at Oxfam) at the Marshall Society Economics Conference in Cambridge in January 2014read more...»
Notes taken from the Marshall Society Economics Conference - this panel session focused on growth and development issues in South Korea and sub Saharan Africaread more...»
Here are some notes taken from a talk given by Peter Coy, Economics Editor for Bloomberg Businessweek, at the Marshall Society Economics Conference in Cambridge in January 2015read more...»
Notes from a talk given by Liu Xiaoming, Chinese ambassador to the UK at the Marshall Society economics conference in Cambridge in January 2014.read more...»
It's the time of year when many commentators are going back to basics and asking if our dominant economic model - free market capitalism - is a force for good in the world.read more...»
According to Oxfam, half of all the world's wealth is owned by 85 people, who could all fit onto a single double-decker bus.read more...»