An excellent reminder of possibly the single most important structural trend globally. (Only quibble: Could “Poland and Hungary be capped by their EU membership”? - Big (implied) statement about two countries which have received about 3% of their GDP per year from the EU since joining.) Oh, and one more on Europe’s regulatory burden: The latest OECD Econ Outlook has excellent chapter on this. (Spoiler: more regulation than the US, but similar to Australia.)
But these are minor caveats - your big message is spot on.
Brilliant breakdown of the data here. The PISA scores comparison really cuts through the noise about demographics being destiny or whatever. I remeber visiting Seoul a few yars back and seeing how serious they take STEM education even for younger kids, which kinda tracks with the sustained income growth. Makes sense that investing in skills compounds way harder than just having more people.
Excellent Marco. Two reflections that support your view:
- China is now involved in an estimated 70 per cent of world manufacturing and directly responsible for 30 per cent of exports. The idea of putting China in a corner and punish her for supposed bad behavior is just ridiculous- not even Trump thinks it’s possible, only Macron who just came back from Beijing, in a state visit that was supposed (according to French) to convince Xi to stop Russia (one would be excused not to see the logic behind Macron’s idea but this is hardly the only such an occurrence as far as the French President is concerned).
- the political meaning of such a change in massive. On one hand the discredit of democracy as the only political system to promote economic resilience (the sooner we abandon this dogma the more unlikely we are not being able to preserve some form of democracy). But also, the inevitable re-organisation of political power around ‘imperial’ powers and spheres of influence. Here too, the sooner we realise what is happening, the less the chance we (the West) gets crashed by this (although I don’t give us much of a chance).
I find your analysis on the effects (or the lack thereof) of adverse demographics on the economy extremely interesting. The circles of ‘savvy’ economist are filled with those who continue to tell the story of the demographic dividend as something that actually matters for long term growth (while in a world with high debt and AI population growth is more likely a curse).
Thanks Luca. Given your deep knowledge of Asia, I'm happy to see you don't disagree with me. The issue of democracy is especially interesting. A fraught issue to be sure, which requires a separate discussion. Two points to reflect on, in particular, First, that in in my view it is not a simple 1-0 choice, democracy vs autocracy. In the US, Trump has some clear illiberal temptations. In several European countries, censorship is becoming a bit too frequent, and democracy seems to become inconvenient when certain political parties become too popular. Second, democracy requires the population to be informed and rationally engaged, something that no longer seems to be the norm. But as i said, this is for a longer separate discussion.
An excellent reminder of possibly the single most important structural trend globally. (Only quibble: Could “Poland and Hungary be capped by their EU membership”? - Big (implied) statement about two countries which have received about 3% of their GDP per year from the EU since joining.) Oh, and one more on Europe’s regulatory burden: The latest OECD Econ Outlook has excellent chapter on this. (Spoiler: more regulation than the US, but similar to Australia.)
But these are minor caveats - your big message is spot on.
Ah, quibbles and caveats....so typically EUropean ;)
Thanks Erik, we're still overdue for a beeer / coffee!
Brilliant breakdown of the data here. The PISA scores comparison really cuts through the noise about demographics being destiny or whatever. I remeber visiting Seoul a few yars back and seeing how serious they take STEM education even for younger kids, which kinda tracks with the sustained income growth. Makes sense that investing in skills compounds way harder than just having more people.
Excellent analyses.
Security impact on the world transitioning from liberal Western democracies towards not so liberal “Going East world “ looks unpredictable😔
Excellent Marco. Two reflections that support your view:
- China is now involved in an estimated 70 per cent of world manufacturing and directly responsible for 30 per cent of exports. The idea of putting China in a corner and punish her for supposed bad behavior is just ridiculous- not even Trump thinks it’s possible, only Macron who just came back from Beijing, in a state visit that was supposed (according to French) to convince Xi to stop Russia (one would be excused not to see the logic behind Macron’s idea but this is hardly the only such an occurrence as far as the French President is concerned).
- the political meaning of such a change in massive. On one hand the discredit of democracy as the only political system to promote economic resilience (the sooner we abandon this dogma the more unlikely we are not being able to preserve some form of democracy). But also, the inevitable re-organisation of political power around ‘imperial’ powers and spheres of influence. Here too, the sooner we realise what is happening, the less the chance we (the West) gets crashed by this (although I don’t give us much of a chance).
I find your analysis on the effects (or the lack thereof) of adverse demographics on the economy extremely interesting. The circles of ‘savvy’ economist are filled with those who continue to tell the story of the demographic dividend as something that actually matters for long term growth (while in a world with high debt and AI population growth is more likely a curse).
Thanks Luca. Given your deep knowledge of Asia, I'm happy to see you don't disagree with me. The issue of democracy is especially interesting. A fraught issue to be sure, which requires a separate discussion. Two points to reflect on, in particular, First, that in in my view it is not a simple 1-0 choice, democracy vs autocracy. In the US, Trump has some clear illiberal temptations. In several European countries, censorship is becoming a bit too frequent, and democracy seems to become inconvenient when certain political parties become too popular. Second, democracy requires the population to be informed and rationally engaged, something that no longer seems to be the norm. But as i said, this is for a longer separate discussion.
Just. Thank you!
:)