Emerging economies grow up

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The Economist reports that last year:

...emerging economies produced slightly more than half of world output measured at purchasing-power parity. Second, they also accounted for more than half of the increase in global GDP in current-dollar terms. And third, perhaps most striking of all, the 32 biggest emerging economies... grew in both 2004 and 2005. Every previous year during the past three decades saw at least one country in recession—if not a deep crisis.

They believe that this shift in economic power to emerging countries will continue. They also argue that the trend should be cheered by the workers and politicians of developed countries, not feared – though of course there will be losers. Flexible labor and product markets will be essential for developed countries trying to succesfully shift from old industries to new ones as competition intensifies. More data and commentary.

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