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New Global Growth Projections Predict the Decade of India

104 points by romsson 11y ago

dvcc 11y ago
Economic Complexity is a bit weird as it only considers actual goods. For instance in the US, around 80% of the US works in a service providing job, and therefore are not considered as adding to economic complexity (that's most of us). I don't really know how this ever gets wound back in, and would love if someone had an article on how it does. Just something to keep in mind though.
silphe 11y ago
The ranking puts German growth prediction to be almost zero while Japan's to be 2.8? I call this rubbish. Both countries were in the last years demographically pretty similar. Both countries are however diverging pretty swiftly. While productivity in Japan was falling it was increasing in Germany. Moreover the recent development showed that Germany was making gains in demographics with higher birth rate and net migrations. Japan on the other hand was falling in recession several times in the last 5 years alone. Even without extrapolating the current trend, it is obvious that Japan would not do much with regard to its demographics while Germany's demographics is actually changing very quickly (and rather favorably).
- melling 11y ago
  Is there some reason that we should believe that Harvard put little thought into their predictions? An hour doesn't go by on the Internet where someone isn't calling something rubbish based on their limited understanding of a given subject.
- chimeracoder 11y ago
  > Moreover the recent development showed that Germany was making gains in demographics with higher birth rate and net migrations... Germany's demographics is actually changing very quickly (and rather favorably). First, higher birth rate and net migrations are usually a (short-term) drag on GDP, not a boost. Secondly, you can't look at Germany outside the context of being a member of the EU and Eurozone (and currently a very important creditor in the Eurozone). That has a huge impact on Germany's economy.
  - jobu 11y ago
    > First, higher birth rate and net migrations are usually a (short-term) drag on GDP, not a boost. This was my thought as well. Germany has publicly declared that they will take 800k refugees (plus there are likely to be several hundred thousand undocumented immigrants). That will be a huge drag on their economy for a few years, but the long term result is projected to be very positive for their economy.
  - chongli 11y ago
    you can't look at Germany outside the context of being a member of the EU and Eurozone (and currently a very important creditor in the Eurozone) This is exactly right. If a few of Germany's key debtors end up defaulting and exiting the Eurozone, a prospect not so far out of the realm of possibility given the leftward political trend in those countries, then Germany could fall on hard times very quickly.
    - sremani 11y ago
      German export oriented economy needs EU and South Europe cannot devalue their currency and pose threat to German export economy. If they move out of EU and devalue their currencies, Germany is in big big trouble. Disintegration of Europe is delayed but very likely narrative of the decade.
- tosseraccount 11y ago
  Fact check: Japan productivity falling? 2009: $31 2013: $36.24 2014: $36.45 source:http://stats.oecd.org/Index.aspx?DataSetCode=PDB_LV http://stats.oecd.org/Index.aspx?DataSetCode=PDB_LV (GDP per head of population in USD ppp adjusted)
deleted 11y ago
[deleted]
roymurdock 11y ago
Helpful to keep in mind that India recently changed the way it calculates GDP by updating its base year and moving from a cost-of-input calculation to an expenditure calculation. This will give it a nominal boost as many currently non-market activities (cooking, cleaning, child rearing) enter the realm of the market as paid-for services, and are thus counted in the GDP calculation. More on that in this previous article and discussion: https://news.ycombinator.com/item?id=10649925 https://news.ycombinator.com/item?id=10649925 One thing that high growth inevitably brings is the negative externality of pollution, as we've observed in China. GDP figures still do not account for this hugely important factor that degrades the quality of living of those in the affected area, as well as the spillover to the oceans and the atmosphere from improper disposal of waste (burning, dumping). It will be interesting to see how bad the pollution gets as manufacturing continues to ramp up, according to the higher "economic complexity" (read: diversified basket of exports) per Harvard's analysis.
- jmedwards 11y ago
  That's interesting; shouldn't cost-of-input, income, expenditure measures all equal the same amount?
  - chimeracoder 11y ago
    > That's interesting; shouldn't cost-of-input, income, expenditure measures all equal the same amount? In theory, yes, they're all the same. In practice, measuring each of the three has its own challenges, which means the raw numbers will differ. It's just like physics - you can use the work-energy theorem or Newton's laws and arrive at the same result in theory, but depending on the experiment you're running, one may be easier to measure accurately than the other, and you'll end up with slightly different numbers on paper.
- wavefunction 11y ago
  I was just in India in September and there are massive hydro-electric programs going on. Those have their own problems of environmental degradation and damage but I think India is keenly aware of seeing what has happened to China and is trying to avoid some of the same mistakes where possible.
bhouston 11y ago
According to the chart, it will also be the decade of Africa -- which is sort of a nice change. :)
- littletimmy 11y ago
  It is sort of horrible, once you think about it. Africa is the last continent on earth to have abundant wildlife. Development in Africa would mean we lose a large portion of wildlife on earth, forever.
  - bpodgursky 11y ago
    This is not even correct. Endangered species are much safer in the US than Africa, because nobody is eating them for survival or poaching them to sell to the Chinese. Strong institutions and better-than-sustenance jobs are how to protect wildlife.
    - tamana 11y ago
      How many white rhino live in America? America annihilated nearly every large animal species, as part of Manifest Destiny.
      - krapp 11y ago
        You are partially technically correct, except for the minor detail that the native tribes who probably hunted most of the American megafauna to extinction didn't believe in "Manifest Destiny" per se. The reason there were so much buffalo around when Europeans showed up was because all of their typical predators had been killed off a long time ago. Also, as far as I can tell from the limited research I care to do, there has never been a rhino species native to the New World. So to answer your question - there were probably never any white rhinos in America to begin with, and had there been, the Americans who would have killed them are not the Americans you seem to be referring to.
  - bhouston 11y ago
    You value African wildlife more than improved living standards for the 100s of millions of Africans? I think we should preserve the wildlife as best as we can but I think we should also value increased standards of living for 100s of millions of people....
vox_mollis 11y ago
Are long-term GDP growth predictions ever anything other than completely wrong guesses? Why do we take any of this seriously? Even the Federal Reserve and the BEA estimates going out a single year are usually little better than noise.
- fauigerzigerk 11y ago
  Making a prediction for one year may be more difficult than making a prediction over 10 years. Over 10 years, structural factors will dominate, but in any single year something like inventory fluctuations or commodity price jumps/slumps can make a prediction look very incorrect.
  - hodwik 11y ago
    Right, this is the same principle as weather vs. climate predictions.
ramgorur 11y ago
quite an interesting analysis, after india, there comes uganda.
xiaoma 11y ago
And it completely leaves out Taiwan. It's a developed, democratic country with both a population and PPP GDP on par with Australia. Whatever the political motivations, this is just shoddy scholarship.
jt2190 11y ago
> Helpful to keep in mind that > India recently changed the way it calculates GDP... The researchers are doing their own calculation, not using the government's.
rodionos 11y ago
The economic complexity chart is interesting. It basically says that all oil producing nations experienced a decade of rapid simplification. That's not what I think happened with the Gulf/Middle East nations with their forays into real-estate, transportation, and tourism.
scythe 11y ago
I'm curious why they're so down on South America. Growth has been high there and stability is the best in a century.
- sremani 11y ago
  South American economies are tied to commodities, given the slow down in Commodities it makes sense.
melted 11y ago
India has no way to go but up, IMO. Half the country is illiterate, fer chrissakes. Get that number down and growth is more or less inevitable. Social unrest is inevitable as well, though.

104 points by romsson 11y ago

dvcc 11y ago

Economic Complexity is a bit weird as it only considers actual goods. For instance in the US, around 80% of the US works in a service providing job, and therefore are not considered as adding to economic complexity (that's most of us). I don't really know how this ever gets wound back in, and would love if someone had an article on how it does. Just something to keep in mind though.

silphe 11y ago

The ranking puts German growth prediction to be almost zero while Japan's to be 2.8? I call this rubbish. Both countries were in the last years demographically pretty similar. Both countries are however diverging pretty swiftly. While productivity in Japan was falling it was increasing in Germany. Moreover the recent development showed that Germany was making gains in demographics with higher birth rate and net migrations. Japan on the other hand was falling in recession several times in the last 5 years alone. Even without extrapolating the current trend, it is obvious that Japan would not do much with regard to its demographics while Germany's demographics is actually changing very quickly (and rather favorably).

melling 11y ago
Is there some reason that we should believe that Harvard put little thought into their predictions? An hour doesn't go by on the Internet where someone isn't calling something rubbish based on their limited understanding of a given subject.
chimeracoder 11y ago
> Moreover the recent development showed that Germany was making gains in demographics with higher birth rate and net migrations... Germany's demographics is actually changing very quickly (and rather favorably). First, higher birth rate and net migrations are usually a (short-term) drag on GDP, not a boost. Secondly, you can't look at Germany outside the context of being a member of the EU and Eurozone (and currently a very important creditor in the Eurozone). That has a huge impact on Germany's economy.
- jobu 11y ago
  > First, higher birth rate and net migrations are usually a (short-term) drag on GDP, not a boost. This was my thought as well. Germany has publicly declared that they will take 800k refugees (plus there are likely to be several hundred thousand undocumented immigrants). That will be a huge drag on their economy for a few years, but the long term result is projected to be very positive for their economy.
- chongli 11y ago
  you can't look at Germany outside the context of being a member of the EU and Eurozone (and currently a very important creditor in the Eurozone) This is exactly right. If a few of Germany's key debtors end up defaulting and exiting the Eurozone, a prospect not so far out of the realm of possibility given the leftward political trend in those countries, then Germany could fall on hard times very quickly.
  - sremani 11y ago
    German export oriented economy needs EU and South Europe cannot devalue their currency and pose threat to German export economy. If they move out of EU and devalue their currencies, Germany is in big big trouble. Disintegration of Europe is delayed but very likely narrative of the decade.
tosseraccount 11y ago
Fact check: Japan productivity falling? 2009: $31 2013: $36.24 2014: $36.45 source:http://stats.oecd.org/Index.aspx?DataSetCode=PDB_LV http://stats.oecd.org/Index.aspx?DataSetCode=PDB_LV (GDP per head of population in USD ppp adjusted)

deleted 11y ago

[deleted]

roymurdock 11y ago

Helpful to keep in mind that India recently changed the way it calculates GDP by updating its base year and moving from a cost-of-input calculation to an expenditure calculation. This will give it a nominal boost as many currently non-market activities (cooking, cleaning, child rearing) enter the realm of the market as paid-for services, and are thus counted in the GDP calculation. More on that in this previous article and discussion: https://news.ycombinator.com/item?id=10649925 https://news.ycombinator.com/item?id=10649925 One thing that high growth inevitably brings is the negative externality of pollution, as we've observed in China. GDP figures still do not account for this hugely important factor that degrades the quality of living of those in the affected area, as well as the spillover to the oceans and the atmosphere from improper disposal of waste (burning, dumping). It will be interesting to see how bad the pollution gets as manufacturing continues to ramp up, according to the higher "economic complexity" (read: diversified basket of exports) per Harvard's analysis.

jmedwards 11y ago
That's interesting; shouldn't cost-of-input, income, expenditure measures all equal the same amount?
- chimeracoder 11y ago
  > That's interesting; shouldn't cost-of-input, income, expenditure measures all equal the same amount? In theory, yes, they're all the same. In practice, measuring each of the three has its own challenges, which means the raw numbers will differ. It's just like physics - you can use the work-energy theorem or Newton's laws and arrive at the same result in theory, but depending on the experiment you're running, one may be easier to measure accurately than the other, and you'll end up with slightly different numbers on paper.
wavefunction 11y ago
I was just in India in September and there are massive hydro-electric programs going on. Those have their own problems of environmental degradation and damage but I think India is keenly aware of seeing what has happened to China and is trying to avoid some of the same mistakes where possible.

bhouston 11y ago

According to the chart, it will also be the decade of Africa -- which is sort of a nice change. :)

littletimmy 11y ago
It is sort of horrible, once you think about it. Africa is the last continent on earth to have abundant wildlife. Development in Africa would mean we lose a large portion of wildlife on earth, forever.
- bpodgursky 11y ago
  This is not even correct. Endangered species are much safer in the US than Africa, because nobody is eating them for survival or poaching them to sell to the Chinese. Strong institutions and better-than-sustenance jobs are how to protect wildlife.
  - tamana 11y ago
    How many white rhino live in America? America annihilated nearly every large animal species, as part of Manifest Destiny.
    - krapp 11y ago
      You are partially technically correct, except for the minor detail that the native tribes who probably hunted most of the American megafauna to extinction didn't believe in "Manifest Destiny" per se. The reason there were so much buffalo around when Europeans showed up was because all of their typical predators had been killed off a long time ago. Also, as far as I can tell from the limited research I care to do, there has never been a rhino species native to the New World. So to answer your question - there were probably never any white rhinos in America to begin with, and had there been, the Americans who would have killed them are not the Americans you seem to be referring to.
- bhouston 11y ago
  You value African wildlife more than improved living standards for the 100s of millions of Africans? I think we should preserve the wildlife as best as we can but I think we should also value increased standards of living for 100s of millions of people....

vox_mollis 11y ago

Are long-term GDP growth predictions ever anything other than completely wrong guesses? Why do we take any of this seriously? Even the Federal Reserve and the BEA estimates going out a single year are usually little better than noise.

fauigerzigerk 11y ago
Making a prediction for one year may be more difficult than making a prediction over 10 years. Over 10 years, structural factors will dominate, but in any single year something like inventory fluctuations or commodity price jumps/slumps can make a prediction look very incorrect.
- hodwik 11y ago
  Right, this is the same principle as weather vs. climate predictions.

ramgorur 11y ago

quite an interesting analysis, after india, there comes uganda.

xiaoma 11y ago

And it completely leaves out Taiwan. It's a developed, democratic country with both a population and PPP GDP on par with Australia. Whatever the political motivations, this is just shoddy scholarship.

jt2190 11y ago

> Helpful to keep in mind that > India recently changed the way it calculates GDP... The researchers are doing their own calculation, not using the government's.

rodionos 11y ago

The economic complexity chart is interesting. It basically says that all oil producing nations experienced a decade of rapid simplification. That's not what I think happened with the Gulf/Middle East nations with their forays into real-estate, transportation, and tourism.

scythe 11y ago

I'm curious why they're so down on South America. Growth has been high there and stability is the best in a century.

sremani 11y ago
South American economies are tied to commodities, given the slow down in Commodities it makes sense.

melted 11y ago

India has no way to go but up, IMO. Half the country is illiterate, fer chrissakes. Get that number down and growth is more or less inevitable. Social unrest is inevitable as well, though.