What A Surprise!

According to the Financial Times this morning “Vietnam’s economy is expected to maintain rapid growth in the year ahead, after its gross domestic product last year expanded 8.45 per cent – the fastest pace of growth in nearly a decade.” This is to be added to the fact that “Economic growth in Vietnam, which averaged about 7 per cent between 2000 and 2004, has been driven in recent years largely by surging exports, after the signing of a long-anticipated bilateral trade agreement with the US in 2001”.

Now let’s take a quick look at the charts, yes, that’s it: median age 25.51, fertility 2.2 , life expectancy 70.61. The median age is still a little low for achieving complete take-off, but it is certainly in at the bottom end of the ‘new tigers’ range, and with fertility down to 2.2 and life expectancy already comparatively high, that median age looks set to rise rapidly.

Now Hektor will undoubtedly accuse me of more crass demographic determinism. This I refute. I simply suggest that there is a very interesting correlation between these three indicators and economic take-off (as in, show me the cases where this doesn’t apply). That such as co-incidence index may only be a necessary and not a sufficient condition, is I think illustrated by cases like N Korea, Cuba, and now I think (thanks to the unfortunate recent turn in events) Iran where institutional lock-in prevents the economic flexibilisation and global opening which is so necessary to achieve full lift-off. More typically I would say that this institutional-opening process was endogenous to the fertility/life expectancy revolution, which is what makes it all the more interesting to try and understand what it is that drives this.

Nonetheless, one thing is clear: Vietnam is now on the ramp. Now what was that old Jimmy Cliff number? Wouldn’t it have been better put, oh why are we always in the right place at the wrong time?

This entry was posted in A Fistful Of Euros, Economics and demography and tagged , , , , by Edward Hugh. Bookmark the permalink.

About Edward Hugh

Edward 'the bonobo is a Catalan economist of British extraction. After being born, brought-up and educated in the United Kingdom, Edward subsequently settled in Barcelona where he has now lived for over 15 years. As a consequence Edward considers himself to be "Catalan by adoption". He has also to some extent been "adopted by Catalonia", since throughout the current economic crisis he has been a constant voice on TV, radio and in the press arguing in favor of the need for some kind of internal devaluation if Spain wants to stay inside the Euro. By inclination he is a macro economist, but his obsession with trying to understand the economic impact of demographic changes has often taken him far from home, off and away from the more tranquil and placid pastures of the dismal science, into the bracken and thicket of demography, anthropology, biology, sociology and systems theory. All of which has lead him to ask himself whether Thomas Wolfe was not in fact right when he asserted that the fact of the matter is "you can never go home again".

What A Surprise!

The results of the latest GfK’s consumer confidence survey are just in. The results are hardly a surprise. (Btw there is a good discussion of consumption in Germany in this post and comments):

Consumer confidence in Germany, Europe’s largest economy, fell for a second month in three as Chancellor Angela Merkel’s government decided to raise sales tax.

GfK’s confidence index, based on a November survey of about 2,000 people that aims to forecast household spending one month ahead, fell to 3.1 from last month’s revised 3.3 reading, the Nuremberg-based market-research company said in an e-mailed statement today. GfK reiterated its forecast that private consumption won’t increase more than 0.2 percent this year.

Higher energy costs are leaving German shoppers with less money to spend in the holiday season while the prospect of a sales tax increase and an 11.6 percent jobless rate dent sentiment. With the European Central Bank poised to raise interest rates as soon as this week, increased borrowing costs will also crimp spending.

Incidentally Wolfgang Munchau in the FT today states that the recent announcement by Jean-Claude Trichet that the ECB was going to raise eurozone rates “must rank as one of the most bizarre monetary policy decisions of recent times”!

Who am I to disagree.

This entry was posted in A Few Euros More, Economics and tagged , by Edward Hugh. Bookmark the permalink.

About Edward Hugh

Edward 'the bonobo is a Catalan economist of British extraction. After being born, brought-up and educated in the United Kingdom, Edward subsequently settled in Barcelona where he has now lived for over 15 years. As a consequence Edward considers himself to be "Catalan by adoption". He has also to some extent been "adopted by Catalonia", since throughout the current economic crisis he has been a constant voice on TV, radio and in the press arguing in favor of the need for some kind of internal devaluation if Spain wants to stay inside the Euro. By inclination he is a macro economist, but his obsession with trying to understand the economic impact of demographic changes has often taken him far from home, off and away from the more tranquil and placid pastures of the dismal science, into the bracken and thicket of demography, anthropology, biology, sociology and systems theory. All of which has lead him to ask himself whether Thomas Wolfe was not in fact right when he asserted that the fact of the matter is "you can never go home again".