If the Asian Growth Model is not Working Anymore

In 1981 poverty rate in China was 64% of the population, in 2004 the rate was 10%: it means that 500 million people stepped out of poverty (look here and here). China and South-East Asia economies were propelled by export demand and by someone else’s debt. What now? In the words of FT columnist Michael Pettis

The assumption that implicitly underlay the Asian development model – that US households had an infinite ability to borrow and spend – has been shown to be false. This spells the end of this model as an engine of growth.

It seams like bad news for economists pointing at free trade and export-led growth as a practical receipt for development.  It seams like bad news for everybody. People in developing countries need to increase their income, and it is difficult to think how they could find the money in their neighborhoods.

Tuesday, 19 May 2009

Brain matters

Saying that education strengths economic growth sounds good old common sense. But proving and measuring this relation is not immediate and therefore interesting. A reasearch, published last year, does it. Eric Hanushek, Dean T. Jamison, Eliot A. Jamison and Ludger Woessmann estimate that

each additional year of average schooling in a country increased the average 40-year growth rate in GDP by about 0.37 percentage points. That may not seem like much, but consider the fact that since World War II, the world economic growth rate has been around 2 to 3 percent of GDP annually. Lifting it by 0.37 percentage points is a boost to annual growth rates of more than 10 percent of what would otherwise have occurred, a significant amount.

Nonetheless, the research suggests that what really matters for economic growth is the quality of education. In other words it is not enough to send children to school: you have to teach them something. Using test-score performances around the world to measure the cognitive skills of students appears

that countries with higher test scores experienced far higher growth rates. If one country’s test-score performance was 0.5 standard deviations higher than another country during the 1960s (…) the first country’s growth rate was, on average, one full percentage point higher annually over the following 40-year period than the second country’s growth rate. Further, once the impact of higher levels of cognitive skills are taken into account, the significance for economic growth of school attainment, i.e., additional years of schooling, dwindles to nothing. A country benefits from asking its students to remain in school for a longer period of time only if the students are learning something as a consequence.

These results are extremely important especially for the countries of the Bottom Billion. What they are saying is that it is better to invest on the quality of the education (where rate of return is much higher) rather than spending to keep students in schools longer.

Tuesday, 17 March 2009

Crisis from the South

According to Banco de Guatemala, for the first time since 1999, in January 2009 remittances from abroad decreased by 7.75% compared to the same month in 2008. In Guatemala remittance  flows represent 11.89% of GDP. According to the World Bank remittances can represent more than 50% of rurally-based family income and for the International Organization for Migration 30.4% of the population receives money from abroad.

Causes? Probably economic crisis and deportation of  illegal immigrants from the US.

Something is certain: remittances are a strong factor in reducing poverty in Guatemala. If flows continue to decrease is more than probable that poverty will rise in a country where, according to the government, 45,6% of children are already underweight.

Monday, 16 February 2009

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RSS r-bloggers.com

  • easyMTS: My First R Package (Story, and Results)
    This weekend I decided to create my first R package… it’s here! https://github.com/NicoleRadziwill/easyMTS Although I’ve been using R for 15 years, developing a package has been the one thing slightly out of reach for me. Now that I’ve been through the process once, with a package that’s not completely done (but at least has a […]
  • easyMTS R Package: Quick Solver for Mahalanobis-Taguchi System (MTS)
    A new R package in development. Please cite if you use it. The post easyMTS R Package: Quick Solver for Mahalanobis-Taguchi System (MTS) appeared first on Quality and Innovation.
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    A major advantage of General Regression Neural Networks (GRNN) over other types of neural networks is that there is only a single hyper-parameter, namely the sigma. In the previous post (https://statcompute.wordpress.com/2019/07/06/latin-hypercube-sampling-in-hyper-parameter-optimization), I’ve shown how to use the random search strategy to find a close-to-optimal value of the sigma by using various random number generators, including […]
  • Cluster multiple time series using K-means
    I have been recently confronted to the issue of finding similarities among time-series and though about using k-means to cluster them. To illustrate the method, I’ll be using data from the Penn World Tables, readily available in R (inside the {pwt9} package): library(tidyverse) library(lubridate) library(pwt9) library(brotools) First, of all, let’s only select the needed columns: […]
  • A Shiny Intro Survey to an Open Science Course
    Last week, we started a new course titled “Statistical Programming and Open Science Methods”. It is being offered under the research program of TRR 266 “Accounting for Transparency” and enables students to conduct data-based research so that...

RSS Simply Statistics

  • You can replicate almost any plot with R
    Although R is great for quickly turning data into plots, it is not widely used for making publication ready figures. But, with enough tinkering you can make almost any plot in R. For examples check out the flowingdata blog or the Fundamentals of Data Visualization book. Here I show five charts from the lay press […]
  • So You Want to Start a Podcast
    Podcasting has gotten quite a bit easier over the past 10 years, due in part to improvements to hardware and software. I wrote about both how I edit and record both of my podcasts about 2 years ago and, while not much has changed since then, I thought it might be helpful if I organized […]
  • The data deluge means no reasonable expectation of privacy - now what?
    Today a couple of different things reminded me about something that I suppose many people are talking about but has been on my mind as well. The idea is that many of our societies social norms are based on the reasonable expectation of privacy. But the reasonable expectation of privacy is increasingly a thing of […]

RSS Statistical Modeling, Causal Inference, and Social Science

  • When presenting a new method, talk about its failure modes.
    A coauthor writes: I really like the paper [we are writing] as it is. My only criticism of it perhaps would be that we present this great new method and discuss all of its merits, but we do not really discuss when it fails / what its downsides are. Are there any cases where the […]
  • The best is the enemy of the good. It is also the enemy of the not so good.
    This post is by Phil Price, not Andrew. The Ocean Cleanup Project’s device to clean up plastic from the Great Pacific Garbage Patch is back in the news because it is back at work and is successfully collecting plastic. A bunch of my friends are pretty happy about it and have said so on social […]
  • On the term “self-appointed” . . .
    I was reflecting on what bugs me so much about people using the term “self-appointed” (for example, when disparaging “self-appointed data police” or “self-appointed chess historians“). The obvious question when someone talks about “self-appointed” whatever is, Who self-appointed you to decide who is illegitimately self-appointed? But my larger concern is with the idea that being […]