Monday, April 28, 2008
Friday, April 25, 2008
I would say that China has been massively productive but not so much in producing commodities. That means the demand for commodities has gone up much more rapidly than the supply. You could imagine an alternative universe in which China grew by figuring out ways to produce oil, copper, and rice much more cheaply. Of course that's not what happened and it is relatively easy to see why not. Following some good policy changes, Chinese growth has been driven by a massive rural to urban migration and yes we are talking about hundreds of millions of people. It's plastic basketballs that have become cheaper, not the products of farms.
The mere addition of labor inputs to urban areas doesn't, in the short run, help you produce commodities more cheaply. Think of the Solow model where K and L have gone up lots but the rate of generating new ideas is only slightly higher.
When all those new Chinese engineers and scientists are at the peak of their creative powers, this relationship will reverse itself and commodities prices will plunge. But it's quicker to produce another toy than to bring about a new Green Revolution, so in the meantime commodity prices are very high. I give the current price trend another ten or fifteen years or so to run. Eventually high commodity prices will seem permanent and then the bottom will drop out.
We've never had a rapid and successful migration of hundreds of millions before, ever.
Thursday, April 24, 2008
Tuesday, April 22, 2008
A society’s productive base is the source of its well-being. We should note that the productive base is a diverse collection of durable objects, some tangible and alienable (buildings and machinery, land and animals, trees and shrubs), some tangible but non-alienable (human beings, the oceans), some intangible but alienable (codified pieces of knowledge, such as patentable ideas), some intangible and non-alienable (air, skills, the legal framework, and cultural coordinates), and some that involve both human capital and mutual expectations (institutions, social capital).
But how is a generation to judge whether it is leaving behind an adequate productive base for its successor?
Monday, April 21, 2008
Coal-fired Total net maximum capacity * Kendal 3,840 MW * Majuba 3,843 MW * Matimba 3,690 MW * Lethabo 3,558 MW * Tutuka 3,510 MW * Matla 3,450 MW * Duvha 3,450 MW * Kriel 2,850 MW * Arnot 2,020 MW * Hendrina 1,895 MW * Camden 930 (Mothballed, being recommissioned) * Grootvlei -- (Mothballed, being recommissioned) * Komati -- (Mothballed, being recommissioned)
Nuclear * Koeberg 1,800 MW
Gas/liqued fuel turbine 925 MW Hydroelectric 600 MW
Pumped storage schemes 1,400 MW
Friday, April 18, 2008
Wednesday, April 16, 2008
Tuesday, April 15, 2008
Friday, April 11, 2008
Thursday, April 10, 2008
The first main conclusion of this Report is that African countries have recorded strong economic performance for the third consecutive year, with an average growth rate of 5.8 per cent. This strong performance is due to a range of factors, including high commodity demand and prices and increased output in key sectors such as agriculture and services.
The second is that despite high growth rates in recent years, this strong performance has not translated into meaningful gains in terms of social development. African governments need to increase investments in social sectors, and also improve the efficiency of social sector expenditures. At the same time, gains from growth need to increase, by better targeting of employment creation through broader and more
flexible macroeconomic frameworks and sectoral policies.
Increasing wealth and increasing poverty at the same time creates a negative spiral of ever-increasing relative deprivation and social division. In some systems this increases the risks of violent outbursts by those who are left behind, in other systems this raises the risks of repression. It seems to me that no system can sustain a spiral of rising inequality in the long run without imploding or resorting to some form of repression.
Friday, April 4, 2008
poverty and inequality from their high levels under apartheid. The reality has been
disappointing: despite steady economic growth, income poverty probably rose in
the late 1990s before a muted decline in the early 2000s, income inequality has
probably grown, and life expectancy has declined. The proximate causes are clear:
persistent unemployment and low demand for unskilled labour, strong demand for
skilled labour, an unequal education system, and a social safety net that is
unusually widespread but nonetheless has large holes. It is also clear that
economic growth alone will not reduce poverty or inequality. Pro-poor social
policies are important, but not as important as a pro-poor economic growth path.
Unfortunately, there is little sign of the political conditions changing to push the
state towards the promotion of a more pro-poor pattern of economic growth.
There is some chance of parametric reforms of the welfare state. Overall, however,
it is likely that, after another ten years of democracy, unemployment and poverty
rates will remain high, despite significant redistribution through cash transfers,
and incomes will continue to be distributed extremely unequally.
See also earlier post Poverty Data continues to make headlines in South Africa