I mean it’s economy is really big. Have a look at these very nice visualisations which make exactly that point from a GDP point of view:
Or if you’re more interested in the other ‘powerhouse’ economies of the world, consider this:
Big place and nice pictures to make that point…
The British Secretary of State yesterday pre-launched a strategy for growth in Britain, and today his department will publish the full strategy. Odds are there will be a lot of interesting initiatives, both from an economic and election point of view. In his speech yesterday though he said something very catchy:
“We [Britain] did well in the American century. We can take little for granted in the Asian century.” (p. 15)
It seems the old superpower – the 19th century is often referred to as the ‘British Century’ – is getting ready for yet another change in global conditions towards Asia. Yes, I know it may be old-hat that there is an on-going shift towards Asia, and that the term has been around since the 1980s but even so, it is interesting to see a government taking a stand and developing its policies in such a light.
Back in March the boys at South Park wrote an episode on the economy which is just fantastic. “You have brought the economy’s vengeance upon yourself!” Announces the father, and ye must repent, by spending less!
In that we have the Paradox of Thrift, and so enter the son, ‘a young jew’, preaching that we must spend more, not less. The economy is not some vengeful omnipotent being but is based on faith:
The full episode is great fun, and you can watch it (legally) in installments here [1, 2, 3]. But one last thing has to be mentioned. In dealing with the credit crunch, Stan – another boy – tries to return a blender bought on credit, eventually ending up at the US Treasury who owns the bad debt. The Treasury agrees to refund him, and goes off to value the blender… This is beautiful:
It reminds me of the Treasury spokes-person, who on the 23 September 2008 explained where they had gotten the $700 billion initial bail-out figure from: “It’s not based on any particular data point, we just wanted to choose a really large number.” Lovely.
Since the start of term I have attended quite a few introductory sessions to various economics classes. Here I keep hearing my colleagues telling the students that they are privileged to be living in such exciting times, and to learn economics when it is so topical.
What everyone neglects to tell the students, is that we have no idea what’s going on, while the slides and theories from last years classes – which we may recycle – won’t shed any light on what’s actually going on…
Shame really, because I think it is a great time to be doing economics, but now people are excited about studying the actual economy and not slavishly believing in the complete truth of economics as revealed by standard axioms. So let’s try and reverse the process Leijonhufvud complained about:
Once the Cobb-Douglass production function was invented, no economist has since studied production
-Axel Leijonhufvud (2002: 23-4)
Go on, read (or teach?) the U.S. stimulus package (or maybe our suggested edit to the package), find out how money supply really works in the economy, see what institutions actually do and how the global financial system works (Basel II anyone?), without having to believe in the effective market hypothesis. It’s a brave new world out there – at least for the next few months.
