12
Apr
2017
The Recipe for Economic Growth
Abir Doumit relays some of the facts on how countries grow rich. In the beginning it’s standard stuff for most of you, but they get into some things that are not as commonplace. (I think Dan Mitchell of Cato was the lead writer.)
Dunning-KrugerCard-Krueger fans on suicide watch:http://reason.com/blog/2017/04/11/san-diegos-experiment-with-higher-minimu
The present level is good by historical standards, the growth rate isn’t.
Also, especially adjusted for race, isn’t New York City richer than either Hong Kong or Singapore? New York City also contains more people than Hong Kong. And New York City is well known for its lack of economic freedom.
Also, there are obvious outliers re: economic freedom, namely, Georgia, Kyrgyzstan, and Macedonia, which have both low RGDP per capita and low growth.
The Soviet Union had no economic freedom; it still had a decent amount of economic growth (though not, by any imagination, as much as the East Asian tigers). Had it grown at its mature rate of growth, it would have today the same RGDP per capita its constituent republics actually do at present (though much of it would, of course, be less usefully allocated).
Chile, though, is an obvious example of how more economic freedom can lead to higher economic growth, so I’m glad it was mentioned. It is notable, however, that Mexico and Brazil grew quite fast between 1945 and 1980 while still very statist, though their economies have severely stagnated thereafter.
I think there are many paths to economic growth; the Ron Paulian free-market model is certainly one of them. More economic freedom appears only necessary to go beyond ~$20,000 GDP per capita (PPP, 2005 dollars).
Economic growth turns out to be closely tied with beard growth. This explains a lot.
https://youtu.be/u9fbSGchSr0
That was entertaining, but also thought provoking.
The link between beards and Marxism made sense.