Economic Systems Archives

For Africa, South Korea Sets a Knowledge-Economy Example

Twenty-first century competition is centered on the knowledge economy, with Europe and North America inexorably charting the course of development in the international arena. In calculated steps, Latin America and Asia have been asserting the need for enhanced knowledge economy strategies in their own pursuits of national and regional development. The historic pattern formulated by Japan has set the course for the People’s Republic of China (PRC), Malaysia, and the newly industrialized economies of Asia.

The ‘Economic Ignorance’ Claim

During the UK’s EU referendum campaign, the economy was reported to be an important topic for the electorate. Yet voters said they were not being told enough to get a clear view of the economic consequences of their choice.

Moving Beyond Money, Capitalism?

Picture a world where robots do all the work while humans enjoy life unburdened by labour. This is an old dream of radicals and Marxists.

The Great Debate Over Financial Crisis Recovery Time

There is a debate. On one hand is Summers, who argues that modern economies have entered an era of secular stagnation. Full utilization of the factors of production and particularly capital and labor is not possible without stimulating aggregate demand in a way that facilitates bubbles. The broad strokes of the argument can be found implicitly or explicitly in much of the commentary and economic analysis.

Some Economies are Tougher than Others

Markets have been in turmoil for much of the year on concerns the global economy is heading for another recession. The suspected culprits are many: the plunging price of commodities and oil, crisis in the Middle East, a slowing China and other emerging countries and weak prospects for financial markets in general.

Coming less than a decade since the global financial crisis dealt a devastating blow to economies around the world; the current challenges raise the question of how resilient our societies are to such shocks.

Supplementing GDP with Wealth Statistics

Suppose you are an investor evaluating a company, but you only have its income statement. There you have revenue, expenses, profit and profit growth. If the company has experienced high profit growth then this may indicate future growth, and imply a sound investment. However, if you can’t tell whether the company is simply selling off its assets, as shown on the balance sheet, then you will not have a good idea of the company’s potential for future growth. This same logic applies for measuring the wellbeing and development of nations and communities.

Support Gives Way to Antagonism for Africa’s Informal Economy

The informal economy in Africa is big business. The International Labour Organisation (ILO) estimates that its average size as a percentage of gross domestic product in sub-Saharan Africa is 41%. This ranges from under 30% in South Africa to 60% in Nigeria, Tanzania and Zimbabwe.

It is also a huge employer. It represents about three-quarters of non-agricultural employment, and about 72% of total employment in sub-Saharan Africa. About 93% of new jobs created in Africa during that 1990s were in the informal economy.

Prefer Your Economy in the Shadows? Try Turkey, Mexico, or Estonia

The Organization for Economic Cooperation and Development (OECD) recently released a study on the “unregistered economies” of its various member states. According to the study, the nation with the largest portion of its economy in the unregistered territory was Turkey, followed closely by Estonia and Mexico.

Maximizing the Time Spent in the ‘Positive per Capita Income Growth’ State

Once again, the top priority at all levels of the world income distribution is sustaining growth and escaping traps — be they low income traps, middle income traps or even secular stagnation traps in advanced economies. In the Asia Pacific, as growth in China slows, policymakers are increasingly asking what this means for their economies. Against this backdrop, the key question now for Asia’s emerging and frontier economies is what can be done to maintain the pace of convergence to higher per capita income.

Douglas C. North Understood Economics Better than Most

Douglass C. North, who died last week at the age of 95, was one of the less well-known Nobel Laureates in economics. However, his contributions to economic theory have had an enormous influence on how scholars understand institutions and the process of economic change.