Catching Up at Different Speeds

Without relatively high savings, a developing country like China may never catch up.

Growth took off in China. The Chinese started catching up very quickly with the United States.

Coherent programs to promote economic catch up are relatively straightforward.

To begin, the national champions of the catch up phase must be rendered accessible to competitive assault.

Some developing countries, especially in Africa, are late starters and their markets are relatively underdeveloped.

If that happened, other countries Australia, New Zealand, and, most importantly, India might seek to jump on the bandwagon.

But the economics of innovation are very different for those at the frontier versus those who are followers striving to catch up.

First, although some parts of the economy reached advanced industrialization in record time, other parts (and institutions) are struggling to catch up.

It permits self confident political leaders to take charge of their own future. It allows them to shape the narrative that underpins market confidence, rather than play catch up.

This time, TFP growth soared to 5 6 , partly owing to the catching up process facilitated by China s adoption of foreign technology and know how.

Manufacturing enables rapid catch up because it is relatively easy to copy and implement foreign production technologies, even in poor countries that suffer from multiple disadvantages.

Leaders of OECD countries should look at Italy and recognize the dangers emerging from their young people who are being left behind.

One could argue that South Korea is not yet a mature economy and is only catching up with a more advanced Japan.

Coherent programs to promote economic catch up are relatively straightforward. But the transition from follower to leader at the frontier of the innovation economy is more challenging and elusive.

Some conspiracy minded commentators even suggest that this is related to Europe s lack of competitiveness instead of trying to keep up, they say, Europe has decided to find a way to slow everyone else down.

This opens up some room for governments to maneuver. It permits self confident political leaders to take charge of their own future. It allows them to shape the narrative that underpins market confidence, rather than play catch up.

HONG KONG For 250 years, technological innovation has driven economic development. But the economics of innovation are very different for those at the frontier versus those who are followers striving to catch up.

In any meaningful international comparison, China s per capita stock of physical capital is still 8 10 times lower than in advanced countries like the United States and Japan. Without relatively high savings, a developing country like China may never catch up.

Political institutions needed to catch up.

Leaders of OECD countries should look at Italy and recognize the dangers emerging from their young people who are being left behind. In Italy itself, it is high time that older generations start acting with wisdom.

Many of them have rejoined their families.

Still Running

Everyone is still smiling.

Sami is still married.

Sami is still single.

Aart is still racist.

But he continues to demur, he told me.

The threat remains.

People are still passive.

But it still hurts.

If I would split China, look here, Shanghai has already catched up.

The Dollar is Still King

We still have ten miles to go.

It's too early to get up.

Tom is still in Boston.

Tom is still at school.

Fadil still loves Dania.

It was still dark.

Sami still cares about Layla.

Sami still likes Layla.

Sami still likes Layla.

Sami still remembers.

Inflation Is Still the Lesser Evil

But there is still a need to be vigilant.