Comments on Stephen Grenville “Why forecasting has broken down”, 10/01/2013, http://www.businessspectator.com.au/bs.nsf/Article/Global-economy-fiscal-policy-forecasting-models-ec-pd20130108-3R4MS?OpenDocument
I think the reasons why those international forecasters consistently got their forecasts wrong you mentioned are correct ones, though there might be more than those.
I think there might be a different effect of globalisation on the aggregate demand and supply of an economy.
The conventional frameworks for macroeconomics may suffer from lacking a closer look at the effect of globalisation on the supply side in the context of a serious supply side shock in the wake of the GFC and the ensuing various other related government debts and fiscal problems.
Let's say various macro policies do have an effect on increasing the aggregate demand of an economy, but that may not necessarily restore the domestic supply side when international supply can substitute domestic supply due to their advantages in being unaffected by the supply side forces that exist in the more advanced economies such as the US and EU.
This increased effect of globalisation and trade substitution on the side supply may suggest that the full recovery of the advanced economies to their normal growths may take longer time even though the macroeconomic policy particularly the monetary policy is much more accommodating now as compared to the 1930s.
Unless the governments can come up with new ways to restore the domestic supply side of an economy, the road to recovery will be long and hard for those economies.
Showing posts with label globalisation. Show all posts
Showing posts with label globalisation. Show all posts
2012-08-01
New application of comparative advantage trade theories
Comments on Christopher Findlay and Dean Parham "
Blurred borders: ‘offshoring’ Australian business", 31/07/2012 http://www.eastasiaforum.org/2012/07/31/blurred-borders/
It seems the new model is a development of the comparative advantage trade theories albeit at the production/value chain as compared to the whole production process.
It also implies that new comparative advantages may have a strong focus on fast innovation and rapid response, as compared to the past simple capital/labor type.
It is a more complex model with fine distinction of elements of sources of comparative advantage.
Economists must also be innovative and creative in theorising new practice and economic reality.
Businesses must also be highly adaptive to globalisation trends and regional and global economic integration.
2011-03-10
Is "China challenge" imagination of the US to keep power?
Comments on Geoffrey Garrett “China challenge will bind us closer to Washington”, 10/03/2011, http://www.theaustralian.com.au/news/opinion/china-challenge-will-bind-us-closer-to-washington/story-e6frg6zo-1226018636983
The so called China challenges are likely to be highly exaggerated and appear to be a product of an extension of the cold war mentality.
Don't get me wrong and China is and will be different in some areas from the west, but it will surely be responsible stakeholders of the global affairs.
It is bizarre that the failure of Copenhagen has been largely and singly attributed to China. It is beyond belief that China had that power then and could single handed bring down Copenhagen. It was more likely that the divide between the industrialised and developing especially the emerging ones that resulted in the failure of reaching an agreement, particularly in terms of binding reduction targets for them.
Since the collapse of the former USSR, the US was keen to target China, even though 9.11 temporarily changed its priority.
Now it is getting out of Iraq and Afghanistan wars, so it may resume its earlier priority of targeting China.
But the world has changed so much and China has largely integrated into the global economy, all that makes it difficult for the US to contain China.
Further, the shift in the global economy means it is virtually impossible for it to do it, even if its wishes to.
PS: the TPP is likely to be a distracter for the DOHA round and is likely to be another US strategy to bypass global institutions to achieve its narrow the narrow objectives of the US. It is uncertain whether the main west pacific economic powers will join it or not. If they don’t, then it is unlikely to be a true TPP.
Besides, the world is changing and both the US and Australia also need to keep with it. The mentality of past and the desire to keep it unchanged that way may not be realistic and achievable, and is seriously out of date.
The so called China challenges are likely to be highly exaggerated and appear to be a product of an extension of the cold war mentality.
Don't get me wrong and China is and will be different in some areas from the west, but it will surely be responsible stakeholders of the global affairs.
It is bizarre that the failure of Copenhagen has been largely and singly attributed to China. It is beyond belief that China had that power then and could single handed bring down Copenhagen. It was more likely that the divide between the industrialised and developing especially the emerging ones that resulted in the failure of reaching an agreement, particularly in terms of binding reduction targets for them.
Since the collapse of the former USSR, the US was keen to target China, even though 9.11 temporarily changed its priority.
Now it is getting out of Iraq and Afghanistan wars, so it may resume its earlier priority of targeting China.
But the world has changed so much and China has largely integrated into the global economy, all that makes it difficult for the US to contain China.
Further, the shift in the global economy means it is virtually impossible for it to do it, even if its wishes to.
PS: the TPP is likely to be a distracter for the DOHA round and is likely to be another US strategy to bypass global institutions to achieve its narrow the narrow objectives of the US. It is uncertain whether the main west pacific economic powers will join it or not. If they don’t, then it is unlikely to be a true TPP.
Besides, the world is changing and both the US and Australia also need to keep with it. The mentality of past and the desire to keep it unchanged that way may not be realistic and achievable, and is seriously out of date.
2011-02-01
Globalisation fruits
Comments on Michael Stutchbury “Globalisation's fruits sweet and sour”, 1/02/2011, http://www.theaustralian.com.au/business/opinion/globalisations-fruits-sweet-and-sour/story-e6frg9p6-1225997666249
In Australia we talk about the two speed economy associated with the mining boom.
The mining boom is a result of the two world speed economy, one booming large developing economies and the more industrialised economies.
The world economy is and will continue to display very different dynamics over the next two decades as Asian economies continue to achieve high growth.
This world economic dynamism has just caused a re-alignment of world prices including wages, but its impact on that process will be increasingly greater and accelerated over the coming years.
It is likely to be a significant change in wealth allocation in the sense that some developing countries will be able to buy assets world wide more cheaply while most industrialised countries will have to pay comparatively more for their needs.
The euro zone will pay a greater price for its inflexible monetary system than if it were not a monetary union of fiscally independent countries.
There will be larger labour movement from more problematic countries to more sound economies in the euro zone. That movement could be smaller under a more flexible monetary arrangement. That forced larger labour movement will cause more dislocation of other resources that is why it is suboptimal financial arrangement.
However, even if the euro zone can overcome this crisis without too much damage on itself, then in the longer run, its member countries will be forced to be more prudent in their individual fiscal affairs and possibly more coordination between the members.
In Australia we talk about the two speed economy associated with the mining boom.
The mining boom is a result of the two world speed economy, one booming large developing economies and the more industrialised economies.
The world economy is and will continue to display very different dynamics over the next two decades as Asian economies continue to achieve high growth.
This world economic dynamism has just caused a re-alignment of world prices including wages, but its impact on that process will be increasingly greater and accelerated over the coming years.
It is likely to be a significant change in wealth allocation in the sense that some developing countries will be able to buy assets world wide more cheaply while most industrialised countries will have to pay comparatively more for their needs.
The euro zone will pay a greater price for its inflexible monetary system than if it were not a monetary union of fiscally independent countries.
There will be larger labour movement from more problematic countries to more sound economies in the euro zone. That movement could be smaller under a more flexible monetary arrangement. That forced larger labour movement will cause more dislocation of other resources that is why it is suboptimal financial arrangement.
However, even if the euro zone can overcome this crisis without too much damage on itself, then in the longer run, its member countries will be forced to be more prudent in their individual fiscal affairs and possibly more coordination between the members.
2010-06-12
China and the Chinese are not stupid
Comments on Edward Kus “Is China returning to old ideas?” 11/06/2010, http://www.eastasiaforum.org/2010/06/11/is-china-returning-to-old-ideas/#more-12393
China is never likely to return to those old ideas that Edward Kus mentioned.
For one thing, those ideas were formed in the long history that China knew very little the outside world due to geographical, transportation and communication barriers between China and the outside world.
The west invasion has forever changed those old ideas.
They may never give up certain values of their own as every nation won't, but China and the Chinese have moved on.
They are not as silly or stupid as some other people with their own old and outdated ideas are.
Globalisation and the benefits China has derived from it means it will never retreat from integration with the world.
It is just as simple as that. To say or believe otherwise is not only ridiculers but laughable.
China is never likely to return to those old ideas that Edward Kus mentioned.
For one thing, those ideas were formed in the long history that China knew very little the outside world due to geographical, transportation and communication barriers between China and the outside world.
The west invasion has forever changed those old ideas.
They may never give up certain values of their own as every nation won't, but China and the Chinese have moved on.
They are not as silly or stupid as some other people with their own old and outdated ideas are.
Globalisation and the benefits China has derived from it means it will never retreat from integration with the world.
It is just as simple as that. To say or believe otherwise is not only ridiculers but laughable.
2010-06-07
Global energy security needs greater global cooperation
Comments on Andrew Kennedy “Rethinking energy security in China”, 6/06/2010, http://www.eastasiaforum.org/2010/06/06/rethinking-energy-security-in-china/
I agree completely that a multilateral approach to energy interdependence is the best way forward for China.
China's rapid industrialisation and urbanisation process has further exposed problems in world energy in terms of efficiency and over reliance on non-renewable fossil fuels and will continue to do so, as well as energy security.
Globalisation requires strengthening global institutions and cooperation more effectively.
Energy is an important part in global cooperation. It has the potential of rivalries and conflicts and Iraq has probably been a case study.
I agree completely that a multilateral approach to energy interdependence is the best way forward for China.
China's rapid industrialisation and urbanisation process has further exposed problems in world energy in terms of efficiency and over reliance on non-renewable fossil fuels and will continue to do so, as well as energy security.
Globalisation requires strengthening global institutions and cooperation more effectively.
Energy is an important part in global cooperation. It has the potential of rivalries and conflicts and Iraq has probably been a case study.
2010-04-12
Globalisation and cultural changes
Comments on PHILLIP COOREY “How the West was lost: a lack of faith in civilisation”, 12/04/2010, http://www.smh.com.au/opinion/politics/how-the-west-was-lost-a-lack-of-faith-in-civilisation-20100411-s0ow.html
It seems that many people have not catch up with globalisation, or don't understand what it means.
Every culture will change or be shaped and become more similar to each other.
There is no use to lament inevitable changes.
No change means no or not to progress.
Cultural elites need to wake up.
It seems that many people have not catch up with globalisation, or don't understand what it means.
Every culture will change or be shaped and become more similar to each other.
There is no use to lament inevitable changes.
No change means no or not to progress.
Cultural elites need to wake up.
2010-02-08
China and the world: challanges and opportunities
Comments on Richard Rigby “The challenge of China”, 7/02/2010, http://www.eastasiaforum.org/2010/02/07/the-challenge-of-china/comment-page-1/#comment-96074
While I agree with Richard Rigby on many of his points, I think we should not over-state some of the issues.
Globalisation does not mean every country will be the same and some differences and possibility significant ones will remain between nations, although the world is getting more similar in the process.
While the Chinese including their leaders may need to rethink their approach to their formulation of "nei wai you bie" (meaning there is difference between domestic and international matters), the essence of that formula is likely to remain in the foreseeable future.
Just pause for a while and think about how the Australian government has treated foreign investments, especially more pointedly at the Chinese investments, can't one see the application of that formulation in Australia?
We are used to this, why is it difficult for the Chinese to have loot after their own national interests?
That is just one of the issues that I might have a different view from that of Rigby's in this article.
I feel overstating the challanges may make people forget and miss the opportunities that should arise and present tehmselves and should be grabbed in the next decades to come.
While I agree with Richard Rigby on many of his points, I think we should not over-state some of the issues.
Globalisation does not mean every country will be the same and some differences and possibility significant ones will remain between nations, although the world is getting more similar in the process.
While the Chinese including their leaders may need to rethink their approach to their formulation of "nei wai you bie" (meaning there is difference between domestic and international matters), the essence of that formula is likely to remain in the foreseeable future.
Just pause for a while and think about how the Australian government has treated foreign investments, especially more pointedly at the Chinese investments, can't one see the application of that formulation in Australia?
We are used to this, why is it difficult for the Chinese to have loot after their own national interests?
That is just one of the issues that I might have a different view from that of Rigby's in this article.
I feel overstating the challanges may make people forget and miss the opportunities that should arise and present tehmselves and should be grabbed in the next decades to come.
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