Dear Readers
Finally the truth is out about the Australian economy: it is in recession. The real world has been telling us this for a year, but the Australian Government and much of the media has been hiding behind mining activity skewed aggregate GDP data. Could be good for some borrowers, but those that are worried about security of employment will not want to become even more indebted. Add to this the fiscal contraction from governments at all levels, and 2013 will be horrible for many people.
Thursday, 6 December 2012
Monday, 3 December 2012
ASIA: WHAT NEXT?
Prominent US economist Paul Krugman called the Asian Tigers "Paper Tigers" a long time ago. But was he correct on the result, if a little mistimed? There seems to be some gloom about China, Japan, South Korea and Japan. India is slowing and Hong Kong is experiencing slower growth.
It seems likely that the major effects of transitioning these economies may now have been felt, and that growth in GDP/GSP will slow. This has happened in western economies previously.
In Australia, GSP per capita growth is a lot less than GSP/GDP overall. It may even be negative. That is why people are feeling poorer even though aggregate Australian GDP data are very strong at present.
The big dynamic though is developments in the United States. Manufacturing is being repatriated from Asia back to the US. We will see a relatively low cost, high quality economy in the US. This will give Asian countries a shock. The US will suck in capital from all over the world.
The demographic benefits that will follow for the US are losses elsewhere, including Australia if it wants to emulate Silicon Valley.
It seems likely that the major effects of transitioning these economies may now have been felt, and that growth in GDP/GSP will slow. This has happened in western economies previously.
In Australia, GSP per capita growth is a lot less than GSP/GDP overall. It may even be negative. That is why people are feeling poorer even though aggregate Australian GDP data are very strong at present.
The big dynamic though is developments in the United States. Manufacturing is being repatriated from Asia back to the US. We will see a relatively low cost, high quality economy in the US. This will give Asian countries a shock. The US will suck in capital from all over the world.
The demographic benefits that will follow for the US are losses elsewhere, including Australia if it wants to emulate Silicon Valley.
Subscribe to:
Comments (Atom)