tag:blogger.com,1999:blog-9213419865081436696.post3438359121290069128..comments2020-05-13T13:34:33.831-07:00Comments on Gray is colorful: The case for optimism in a crazy worldAnonymoushttp://www.blogger.com/profile/10573437199746714765noreply@blogger.comBlogger4125tag:blogger.com,1999:blog-9213419865081436696.post-55837288202836055482015-04-08T10:00:30.114-07:002015-04-08T10:00:30.114-07:00Hi Nikita,
Of course I remember you! and thanks ...Hi Nikita, <br /><br />Of course I remember you! and thanks for your interesting remarks. I'll preface by saying I disagree with many of your points, although I find them thought provoking. So let me answer them:<br /><br />GDP is a measure of production, though it is indeed calculated by looking at prices and quantities. Debt does not change the production capabilities of a country --- its factories, offices, available working population, and so on... (i.e. factors of production) Debt can be used to finance unproductive mean or 'artificially' (not really though -- there is nothing artificial about dent financed consumption) increase demand, which then increases productivity. Nonetheless, that does not change the fact that productivity is not influenced by debt.<br /><br />(check http://noahpinionblog.blogspot.com.es/2012/03/how-can-debt-affect-potential-gdp.html to read a bit about this type of an economy-is-like-a-family fallacy)<br /><br />Moreover, while debt can be very burdensome on a country (e.g. Greece), and can transfer wealth between generations (especially if it directed towards consumption) this idea of GDP-net-debt mentioned in the link does not seem very promising to me. The figures presented on this blog show that 'real net debt' GDP of the US has fallen by 45% !!!!! between 2009 and 2013, while that of Russia increased by 30%. I doubt these figures very very much (they are way beyond 'a bit extreme').<br /><br />As a whole, I would be wary of what seems to me as an ideologically motivated arguments presented in that blog. <br /><br />I disagree with you about the idea the developed world is getting (or will get) poorer. Though it does not seem likely to grow in the rates it saw in the second half of the 20th century, the rich world is definitely growing. The biggest problem, as it seems to me now, may be rising inequality and the stagnation of the middle class. <br /><br />Wealth (per capita), it seems, is almost always the result of good institutions (governments, rule of law, lack of corruption) and technology. It has shown repeatedly that resources do not necessarily lead to wealth (Spain in 15th century, Middle east with oil, Africa with many many resources), sometimes even the other way around. <br /><br />I do agree though that much of the developing world is going in the right way. That is excellent an I am very optimistic about many countries!<br />Anonymoushttps://www.blogger.com/profile/10573437199746714765noreply@blogger.comtag:blogger.com,1999:blog-9213419865081436696.post-72447629655370865752015-03-27T13:01:56.540-07:002015-03-27T13:01:56.540-07:00Hey Sayag! It's Nikita from the first year mic...Hey Sayag! It's Nikita from the first year microeconomics class! Hope you remember me, and it's nice to see you have a blog. <br /><br />I have a few remarks though about what you wrote:<br /><br />1)"GDP per capita is simply a measure of the total production (whether it is tractors, corn, banking or magic tricks) divided by population size. In general, the more countries produce, the more they can consume and the higher average living standards become."<br /><br />I would disagree with this. GDP measures the movement of cash. So for example, if we were to just take on massive amounts of debt, then suddenly there is more money moving around in the system, but it says nothing about the productivity or real wealth of society, in fact, it could state the opposite. <br /><br />If we look at growth of GDP net debt, you'll see that the developed world has become significantly poorer over the last 20 years. Here's some research on that:<br />http://www.awarablogs.com/study-on-real-gdp-growth-net-of-debt/<br /><br />I am not sure how accurate the graphs are, they seem a little extreme, but just some food for thought.<br /><br />2) You're right on health though. Aside from a few regions of the world, people are living longer and healthier lives. <br /><br />And as a general note, I honestly believe the developed world is getting poorer. American, European and Japanese real incomes peaked in the 90's. American industrial production is down 25% from 1998, and 19% from 2008, similar stories in Europe and Japan. The traditional wealthy countries are going to get increasingly poorer and poorer in the coming decades, and that wealth is going to the developing world. In the future, I believe that the wealth of a nation will reflect it's population size and resource base. Countries like the Netherlands will suffer. If you want to make a case for optimism, I'd say look at the developing world, not the developed one!Nikitanoreply@blogger.comtag:blogger.com,1999:blog-9213419865081436696.post-9595548172429159312014-10-09T15:51:22.335-07:002014-10-09T15:51:22.335-07:00That is a good point. I hinted at it in the paragr...That is a good point. I hinted at it in the paragraphs following the GDP per capita chart. In an attempt to go beyond GDP per capita, I show statistics of other indicators of quality of life. Of course, improvements in health and reductions in road fatalities may also be unevenly spread in the population. It would be interesting to see data stratified by income/race/education of these indicators, but I am not familiar with such data. Nonetheless, my prior belief is that these indicators are less uneven than GDP per capita.Anonymoushttps://www.blogger.com/profile/10573437199746714765noreply@blogger.comtag:blogger.com,1999:blog-9213419865081436696.post-73798223586429716252014-10-09T10:37:54.881-07:002014-10-09T10:37:54.881-07:00What happens to the division of the rising GDP? Sp...What happens to the division of the rising GDP? Specifically, does the bottom 25% get a share? Median income in US is the lowest it has been in 20 years, and I wonder how does the chart of the first quartile of income looks like (or indeed the bottom 10%). Not to be project pessimism, but I would not be quick to draw a conclusion based on the GDP per capita. Eranhttp://eranraviv.comnoreply@blogger.com