Macroeconomics and Economic Growth
The World Bank released the China Quarterly Update —of which I’m the lead author, full disclosure here-- today at a press launch in our Beijing office. The economic journalists noticed that the Bank’s projection for GDP growth in 2008 is now 9.8 percent, more than 2 percentage points lower than the outcome in 2007.
Will investments in agricultural technology by themselves be sufficient to ensure long-term productivity growth in the farm sector and, more importantly, for rural poverty reduction? As rapidly rising food prices threaten food security and the poverty gains made by developing countries, many have blamed declining funding for agricultural technology development for this state of affairs (for example, the New York Times).
This question is highly relevant for South Asia. Shanta Devarajan has commented on the recent rice export ban by India and its implication for its neighbor, Bangladesh, which has become a net rice importer this year due to floods and cyclone impacts. But Bangladesh also provides evidence that agricultural technology by itself is unlikely to lead to adequate growth in agricultural output if factors such as physical and economic geography and infrastructure needs are not considered.
In a recent study, we examine these issues for Bangladesh. During the early 1990s, Bangladesh experienced widespread diffusion of green revolution technology in rice, its main crop. As a result, rice production has more than doubled since the early 1970s. The spread of green revolution technology is usually expected to boost wages for farm workers. But we found regional differences in rural wages that run counter to the traditional argument.
The question of whether China is overwhelmed by capital inflows has been asked for quite a while now. If a question continues to be asked, there is probably a good reason for it. Whether the answer is yes or no depends on how you look at it.
Soaring food prices have suddenly become a major concern for policy makers in East Asia. The price of rice - which provides one third of the region's caloric intake - is a particular worry. Rice prices have been moving higher since around 2004, although this was from very depressed levels in the early years of the decade. Prices surpassed $300 a ton in early 2006 for the first time since the late 1990s, kept moving higher, and then took off at an accelerating pace from late 2007: up 11 percent in the the fourth quarter, then 56 percent in the first quarter of 2008 an
There's been much talk in recent months about the revision of the International Comparison Program and the PPP (Purchasing Power Parity) figures derived from it.
Only about one-quarter of households living in developing countries have any form of financial savings with formal banking institutions. Even in countries that have experienced substantial development over the last decade or two, this statistic remains stuck stubbornly at a level that would not be acceptable for any other measure of socio-economic development: 10% in Kenya, 20% in Macedonia, 25% in Mexico, 32% in Bangladesh.
Last week China reported its first quarter GDP data. Consumer inflation for the quarter was 8%, which is too high, but we already knew that. The main news was that GDP growth came in at 10.6% year-on-year. This is down from last year’s 11.7% rate, but higher than most forecasts for 2008 (including the Bank’
High food prices on the international markets are getting a lot of attention and are leading to different types of policy action in different countries. Discussions on the impact of international commodity prices on domestic prices often look at how much food countries import.
Web reporters were busy last week with news of soaring prices for grains and other agricultural commodities. Economist.com posted an early entry with Food for Thought on March 27. NYT.com ran