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

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    macOS R users who tend to work on the bleeding edge likely noticed some downtime at this past weekend. Part of the issue was an SSL/TLS certificate expiration situation. Moving forward, we can monitor this with R using the super spiffy {openssl} and {pushoverr} packages whilst also generating a daily report with {rmarkdown} and... Continue […]
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    This post will explore using R’s MLmetrics to evaluate machine learning models. MLmetrics provides several functions to calculate common metrics for ML models, including AUC, precision, recall, accuracy, etc. Building an example model Firstly, we need to build a model to use as an example. For this post, we’ll be using a dataset on pulsar […]
  • Data re-Shaping in R and in Python
    Nina Zumel and I have a two new tutorials on fluid data wrangling/shaping. They are written in a parallel structure, with the R version of the tutorial being almost identical to the Python version of the tutorial. This reflects our opinion on the “which is better for data science R or Python?” They both are […]
  • Does Australia need More Fires (but the Right Kind)? A Multi-Agent Simulation
    We have all watched with great horror the catastrophic fires in Australia. Over many years scientists have been studying simulations to understand the underlying dynamics better. They tell us, that “what Australia needs is more fires, but of the right kind”. What do they mean by that? One such simulation of fire is based on […]
  • Some everyday data tasks: a few hints with R (revisited)
    One year ago, I published a post titled ‘Some everyday data tasks: a few hints with R’. In that post, I considered four data tasks, that we all need to accomplish daily, i.e. subsetting sorting casting melting In that post, I used the methods I was more familiar with. And, as a long-time R user, […]

RSS Simply Statistics

  • Is Artificial Intelligence Revolutionizing Environmental Health?
    NOTE: This post was written by Kevin Elliott, Michigan State University; Nicole Kleinstreuer, National Institutes of Health; Patrick McMullen, ScitoVation; Gary Miller, Columbia University; Bhramar Mukherjee, University of Michigan; Roger D. Peng, Johns Hopkins University; Melissa Perry, The George Washington University; Reza Rasoulpour, Corteva Agriscience, and Elizabeth Boyle, National Academies of Sciences, Engineering, and Medicine. […]
  • 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 […]

RSS Statistical Modeling, Causal Inference, and Social Science

  • Are GWAS studies of IQ/educational attainment problematic?
    Nick Matzke writes: I wonder if you or your blog-colleagues would be interested in giving a quick blog take on the recent studies that do GWAS (Genome-Wide-Association Studies) on “traits” like IQ, educational attainment, and income? Matzke begins with some background: The new method for these studies is to claim that a “polygenic score” can […]
  • Causal inference in AI: Expressing potential outcomes in a graphical-modeling framework that can be fit using Stan
    David Rohde writes: We have been working on an idea that attempts to combine ideas from Bayesian approaches to causality developed by you and your collaborators with Pearl’s do calculus. The core idea is simple, but we think powerful and allows some problems previously that only had known solutions with the do calculus to be […]
  • My review of Ian Stewart’s review of my review of his book
    A few months ago I was asked to review Do Dice Play God?, the latest book by mathematician and mathematics writer Ian Stewart. Here are some excerpts from my review: My favorite aspect of the book is the connections it makes in a sweeping voyage from familiar (to me) paradoxes, through modeling in human affairs, […]