Graph/Table of the week

convergence

From The Economist. It shows how during the last decade and a half developing countries have been growing faster than advanced ones. I would certainly take with a grain of salt some parts of The Economist explanation for this mini-Golden Age (15 Glorious Years is a pun with how the French refer to the Golden Age, the 30 Glorious Years), in particular when they suggest that: “the introduction of market reforms deserves much of the credit for better performance in some countries than in others.” But they are correct that rapid growth in China, higher commodity prices, low rates of interest in advanced economies, and higher volume of trade have played a role in convergence. What The Economist does not say about the increase in trade is that a good part has been South-South trade, which has gone from being about 10% to closer to 30% of total global trade (see here).

Where the poor (and the rich) are

globalwealth

The graph above comes from an updated version of Shorrocks, Davies and Lluberas’s “Global Wealth Report 2012.” The presentation is available here. The rich, the top decile, are basically in Europe, US and Canada, and Japan (that is the relevant Asia-Pacific at the high end), while the poor are in Africa, India and Asia-Pacific excluding China, India, and Japan. China essentially dominates the middle deciles.

PS: I had commented on the original report here.

Graph/Table of the Week

ginilatam

The graph comes from Giovanni Andrea Cornia’s new book “Falling Inequality in Latin America.” Latin America has during the last decade reduced inequality, while in most of the rest of the world inequality increased. The book suggests that Social Democratic and Radical Left governments are part of what explains the fall in inequality. A more limited data set connected to this research can be found here (scroll down for the Excel files).

Graph/Table of the week

Graph below from Piketty’s book, that was already discussed a few times in this blog. The graph shows wealth (not income) of the top 10% and 1% in Europe and the US. Wealth inequality did not increase as much as income inequality in the late 20th century.

Piketty-wealth inequality

Of particular interest is the fact that the US has been since the late 1960s more unequal than Europe. This together with the fact that there is not significant mobility in the US should shatter the myth about the American dream and the idea of the land of opportunity.

PS: For more on mobility go here, where Saez (a co-author of Piketty), and others show that particularly in the South  income mobility in the US is lower than in other advanced economies. Also, this paper shows that mobility is lower in the US than in the UK and Nordic countries.

A debate on Marx’s theory of crisis

latuff-us_bank_crisis

For those interested, a debate has unfolded (last year really) between Michael Heinrich, Fred Moseley and others in the Monthly Review on the tendency of the rate of profit to fall and is available here.

Crisis Theory, the Law of the Tendency of the Rate of Profit to Fall, and Marx’s Studies in the 1870s Michael Heinrich

Response to Heinrich—In Defense of Marx’s Law by Shane Mage

Critique of Heinrich: Marx did not Abandon the Logical Structure by Fred Moseley

A Critique of Heinrich’s, ‘Crisis Theory, the Law of the Tendency of the Profit Rate to Fall, and Marx’s Studies in the 1870s’ by Guglielmo Carchedi and Michael Roberts

Heinrich Answers Critics by Michael Heinrich

Graph/Table of the Week

Again after a brief hiatus a new graph. Below the Conference Board measure of labor productivity.

productivity

The measure is the GDP per person employed in 2013 in dollars and adjusted to Purchasing Power Parity. The colored countries are (from left to right), the US, then Russia and Mexico, followed by Argentina and South Africa and Brazil and China. The last one is India. The range is from around 115,000 in the US to 10,000 in India, with Brazil and China close to 20,000 and the others above 30,000 and below 40,000. The database is available here. Click on the figure to enlarge.

Graph/Table of the Week

fredgraph

If anything this recession is atypical because of the lack of growth in government expenditures. After the initial stimulus, as can be seen in the graph above, the rate of growth of spending drops to zero. The slow recovery shows that lack of Keynesian stimulus, or austerity, does NOT work.