Comments on Tom Conley "Big P Political Economy - The Many Faces of Inequality and Poverty in Australia and the World", 29/06/2015
While the measure of inequality using the GINI coefficient is useful and also be informative, such a measure also has significant shortcomings particularly in a dynamic sense. A more comprehensive measure to reflect both static and dynamic situations or some complementing measures may be needed.
To capture some of the shortcomings of the Gini coefficient measure, one can ask the following question and attempt to answer it:
Do you wish to be 1% better off in a world/country of falling Gini coefficient where the average growth is less than 1%, or do you wish to be 5% better off in a world/country of rising Gini coefficient where the average growth is greater than 5%?
I think that most people are likely to prefer to be in the second situation as opposed to the first one.
If that proposition/supposition is correct, then it means that to simply use the Gini coefficient is problematic and we need to develop another measure to better reflect that.
I would suggest we need some measure of inequality that can also capture the dynamic growth in it. It should not be too difficult to develop such a new measure to better the current simple Gini coefficient.
Showing posts with label growth. Show all posts
Showing posts with label growth. Show all posts
2010-07-23
The current population debate in Australia needs to be full and honest
Comments on Oliver Marc Hartwich “Europe shows the alternative to growth is decline”, 23/07/2010, http://www.theaustralian.com.au/news/opinion/europe-shows-the-alternative-to-growth-is-decline/story-e6frg6zo-1225895851365
While Oliver Marc Hartwich talks about Europe in the wake of the global financial crisis to say how bad the situations are that attempts to attribute problems to low or no population growth, he does not mention the case in the US. Neither does he mention per capita growth that is the key to living standards.
Are the situations in the US any better than those in Europe?
Further, the current debate on population growth in Australia is far from stagnant or decline in population - it is about how rapid the growth should be.
Such attempt to scare people with stagnant or decline in population is unhelpful to a proper debate and is highly misleading.
While Oliver Marc Hartwich talks about Europe in the wake of the global financial crisis to say how bad the situations are that attempts to attribute problems to low or no population growth, he does not mention the case in the US. Neither does he mention per capita growth that is the key to living standards.
Are the situations in the US any better than those in Europe?
Further, the current debate on population growth in Australia is far from stagnant or decline in population - it is about how rapid the growth should be.
Such attempt to scare people with stagnant or decline in population is unhelpful to a proper debate and is highly misleading.
2009-07-22
Trade and growth - an interesting twist
Comments on Ron “PNG: Trade Policy and Trade Agreements”, 21/07/2009, http://www.eastasiaforum.org/2009/07/21/png-trade-policy-and-trade-agreements/
It is discouraging to hear that "there is no convincing evidence of a positive relationship between trade openness and increased growth". The comparative advantage theories of trade are one of the most agreed areas in economics by economists, but now it is in question.
But on the other hand, "other factors, particularly so-called ‘institutional’ factors, are important in whether removing trade restrictions leads to faster growth", we are hearing. Is this another area of the conflicts between micro and macro economics? Does that mean we need a macro intervention of the type of traditional macro economics on trade issues by government, as opposed to free trade?
Economics is complex and increasingly becomes more so, it seems. Education and re-education of economics.
It is discouraging to hear that "there is no convincing evidence of a positive relationship between trade openness and increased growth". The comparative advantage theories of trade are one of the most agreed areas in economics by economists, but now it is in question.
But on the other hand, "other factors, particularly so-called ‘institutional’ factors, are important in whether removing trade restrictions leads to faster growth", we are hearing. Is this another area of the conflicts between micro and macro economics? Does that mean we need a macro intervention of the type of traditional macro economics on trade issues by government, as opposed to free trade?
Economics is complex and increasingly becomes more so, it seems. Education and re-education of economics.
2009-06-03
Trade and GDP growth - a factual rebuttal on strange thinking
Third comments on Mario Lamberte “Some positive consequences of the Global Economic Crisis”, 1/06/2009, http://www.eastasiaforum.org/2009/06/01/some-positive-consequences-of-the-global-economic-crisis/
I have just read the release of Australia's March 2009 GDP data by the Australian Bureau of Statistics (ABS). What I have found is a strong support of the role of trade in the economy. GDP rose by an unexpected 0.4% in the March quarter. Guess what? The largest contribution to that growth was from imports, by 1.6%, on quarterly basis.
What does that say? It suggests that trade can contribute to the economy positively even if during a severe global downturn - in fact a great global recession, although one should recognise that seemingly it is a zero sum. But most people understand that the benefit of trade is never to be a zero sum game - it goes much further than the seemingly zero sum and is an increasing game.
Isn't this amazing? For those who are wondering about and doubting the role of trade and exports in the face of the recession, they need to think again and hard. On that account do we really need any more new economic thinking or new development or growth paradigms?
I have just read the release of Australia's March 2009 GDP data by the Australian Bureau of Statistics (ABS). What I have found is a strong support of the role of trade in the economy. GDP rose by an unexpected 0.4% in the March quarter. Guess what? The largest contribution to that growth was from imports, by 1.6%, on quarterly basis.
What does that say? It suggests that trade can contribute to the economy positively even if during a severe global downturn - in fact a great global recession, although one should recognise that seemingly it is a zero sum. But most people understand that the benefit of trade is never to be a zero sum game - it goes much further than the seemingly zero sum and is an increasing game.
Isn't this amazing? For those who are wondering about and doubting the role of trade and exports in the face of the recession, they need to think again and hard. On that account do we really need any more new economic thinking or new development or growth paradigms?
2009-05-25
A point on the virtues of bulls versus bears
Cooments on Cassandra Wilkinson’s “Gekko was right after all”, 25/05/2009, http://www.theaustralian.news.com.au/story/0,25197,25531334-5017272,00.html
Cassandra Wilkinson has made a point. That is, bulls and bears in the stock markets.
Bubbles in stock markets have been driven by the bulls in the market participants. But when they burst, the bears in the market are in the centre stage and full control.
Although the stock markets world-wide may have recovered from their recent lows, many markets including housing markets as well as the economy in many countries are still definitely bearing. To break the grips from the bears, we need many bulls to come to the stage, or to turn many current bears into bulls.
Yes, it may seem ironic. It was the bulls that cased the bubbles in the first place, but unfortunately what we need most at the moment is bulls and more bulls. We need them to boost confidence! There are too many bears around now and we are bearing. We need strong bulling spirit to get us out this great recession!
Cassandra Wilkinson has made a point. That is, bulls and bears in the stock markets.
Bubbles in stock markets have been driven by the bulls in the market participants. But when they burst, the bears in the market are in the centre stage and full control.
Although the stock markets world-wide may have recovered from their recent lows, many markets including housing markets as well as the economy in many countries are still definitely bearing. To break the grips from the bears, we need many bulls to come to the stage, or to turn many current bears into bulls.
Yes, it may seem ironic. It was the bulls that cased the bubbles in the first place, but unfortunately what we need most at the moment is bulls and more bulls. We need them to boost confidence! There are too many bears around now and we are bearing. We need strong bulling spirit to get us out this great recession!
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