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Answer to Yesterday’s Quick Quiz

October 13, 2015 Leave a comment
Kigali, Rwanda

Kigali, Rwanda

What do the six countries Ethiopia, Congo (Kinshasa), Ivory Coast, Mozambique, Tanzania, and Rwanda have in common? The correct answer is:

c) They make up half the list of the world’s best performing economies over the past few years.

If you chose (a), (b) or (d), your perceptions may be stuck in the past.

For (a), Africa does indeed have many of the world’s worst performing economies for growth, including South Sudan, Burundi, Libya, Equatorial Guinea, and Sierra Leone. So if you picked (a), the problem is seeing “Africa” as a whole, at a time when many of its economies are going in very different directions.

For (b), none of the six countries listed are among the 20 countries Transparency International says have the worst reputations for corruption. Tanzania and Mozambique tie for #119 of 174–not great, but far from worst. Rwanda comes in at #55, ahead of Greece!

If you picked (d), you’d be closer. Mozambique, Ethiopia and Congo are, in fact, three of the poorest countries in the world in terms of nominal per capita income, and none of the six countries listed above are in the middle-income tier. If they maintain the growth rates of the past few years, though, they will quickly move up the ladder. Botswana, for example, now has a standard of living comparable to Mexico.

Quick Quiz

October 12, 2015 34 comments

What do the six countries Ethiopia, Congo (Kinshasa), Ivory Coast, Mozambique, Tanzania, and Rwanda have in common?

a) They make up half the list of the world’s 12 worst performing economies for growth over the past few years.

b) They make up half the list of the world’s 12 most corrupt economies.

c) They make up half the list of the world’s best performing economies for growth over the past few years.

d) They make up half the list of the world’s poorest countries.

e) B and D

Answer tomorrow. Bonus points for students who give the correct answer in the comments!

Notes from China

October 10, 2015 Leave a comment

Seems about right:

…the story that formed is, I think, backed up by stories emerging from elsewhere. In short, the downturn was expected, is real, with varying severity, but there is an underlying story of innovation and entrepreneurship that is hopeful for the future.

Marketing Class Video: Boeing Dreamliner

September 29, 2014 Leave a comment

Economics is No Longer the Dismal Science

I’m optimistic. Here’s why:

China’s Growth Path

April 22, 2014 Leave a comment

When your lowest growth in six quarters is 7.4%, few would worry much about a looming slowdown. But, China is an exceptional case:

Since slower growth is a necessary part of this program, the current slowdown could be read as a positive sign that the days of growth at any cost are over. The announcement last month that deposit rates will be liberalized over the next two years signals an end to financial repression, by which interest paid on savings was kept low to make borrowing cheaper. That suppressed consumption and led to the most lopsided economy the world has ever seen, with investment accounting for about 50% of GDP.

Then again, China isn’t all that exceptional. Other countries have come to this fork in the road.

One thing most everyone agrees on: China is in transition from a go-go phase driven by abundant capital and labor (think of the U.S. in the late 19th century) to a more mature development track in which growth depends on productivity gains. At this point other countries such as Brazil and Malaysia fell into the “middle-income trap” and stagnated, while South Korea and Taiwan powered through to become wealthy, although not without crises along the way.

My guess is this transition is going to look a lot more East Asian than South Asian or South American.

Latin America Rising

February 25, 2014 Leave a comment

Move over, Venezuela, Argentina and Brazil. Mercosur and Andean: there’s a new kid on the block:

Amid all the bad news in the region, the presidents of Chile, Colombia, Mexico, and Peru met with little fanfare in Cartagena last week to seal an economic pact launched in 2012. They call their project the Pacific Alliance, and it will soon include Costa Rica and possibly several other countries. The four founding members are the most successful economies in Latin America; they boast the region’s highest economic-growth rates and lowest inflation rates. Together, they represent 36 percent of the region’s economy, 50 percent of its international trade, and 41 percent of all incoming foreign investment. If the Alliance were a country, it would be the world’s eighth-largest economy and seventh-largest exporter. Its members lead the lists of the most competitive economies in Latin America and those where it’s easiest to do business. Given that trade among the four countries is currently a mere 4 percent of their total trade, the potential to expand trade and investment flows is huge.

This is not only good news for these countries. It may well help reverse the direction of economic policy in Venezuela.