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Posts Tagged ‘GDP

“Our situation is unique in the annals of life, yet inscribed for all time in the logic of history”*…

 

evolution

 

A scan of the history of gross world product (GWP) at multi-millennium time scale generates fundamental questions about the human past and prospect. What is the probability distribution for negative shocks ranging from mild recessions to the pandemics? Were the agricultural and industrial revolutions one-offs or did they manifest dynamics still ongoing? Is the pattern of growth best seen as exponential, if with occasional step changes in the rate, or as super exponential? If the latter, how do we interpret the typical corollary,that output will become infinite in finite time? In a modest step toward answering such ambitious questions, this paper introduces the first internally consistent statistical model of world economic history…

[Looking back to 10,000 BCE, the author concludes that] the world economic system over the long term tends not to the steady growth seen in industrial countries in the last century or so, but to instability. The credible range of future paths seems wide.

Oh, so very wide… David Roodman (@davidroodman) goes big: “Modeling the Human Trajectory” (pdf).

(Image above: source)

* François Meyer, 1974. La surchauffe de la croissance: Essai sur la dynamique de l’évolution

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As we take the long view, we might recall that it is on this date each year that the roughly 300 residents of a small village participate in a drawing that determines who will be sacrificed to insure a good harvest… in Shirley Jackson’s short story, “The Lottery.”

Originally published in the June 26, 1948, issue of The New Yorker, it evoked strong initial negative response; subscriptions were cancelled; much hate mail received throughout the summer; and the Union of South Africa banned the story.  It is now considered a classic of short fiction (and among the most famous American short stories); it spawned several radio, television, and film adaptations, and inspired voluminous analysis, both literary and sociological.

lottery source

 

 

“The welfare of a nation can scarcely be inferred from a measurement of national income as defined by the GDP”*…

 

GDP

 

Is the world becoming increasingly prosperous? It would be hard to answer “yes” right now, at least so far as the leading high-income economies are concerned. Yet the longstanding bellwether of economic progress – inflation-adjusted GDP – has been growing across most of the OECD since 2010, suggesting that everything is fine.

Some 80 years after GDP was introduced, nearly everyone (apart from the indicator’s stewards) has concluded that it is  of economic progress. But there is no consensus yet on a possible replacement. Reaching agreement on an alternative will require a new concept of prosperity and a new way to measure whether living standards are improving…

Over eight decades after its introduction, there is a widespread consensus that GDP is no longer a useful measure of economic progress.  Its successor will need to be compelling and tell a persuasive story, consistent with experience, of what is happening in our economies.  Diane Coyle offers some leads on possible successors: “What Will Succeed GDP?

* Simon Kuznets

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As we grope for good gauges, we might recall that it was on this date in 1848 that a political pamphlet by the German philosophers Karl Marx and Friedrich Engels, The Communist Manifesto, was published.  Commissioned by the Communist League and written in German, it appeared as the Revolutions of 1848 began to erupt.  Subsequently, of course, Marx elaborated on his argument (with Engel’s help, after Marx’s death) in Das Kapital.

150px-Communist-manifesto

Cover of the first edition

source

 

Written by LW

February 21, 2019 at 1:01 am

Shop ’til you drop…

(copyright, Norm Feuti)

Americans are saving more…  which means that they are spending less.  Earlier this year average household debt was 134% of average household disposable income.  If increased savings lowers that to, say, 100% (by way of comparison, the figure was in the 70% range in the Eighties), and the savings rate (which was essentially zero just before the bubble burst) returns to its historic (70-year) average of 9%, it will pull something like $4 trillion out of annual consumption…  that’s to say it would reduce consumption by over 20%.  And since consumption has been running over 70% of our roughly $13 Trillion GDP, that could make a dent in the trajectory of our consumer-driven society.  A pretty big dent.*

How might it accrue? Well, there’s the impact on corporate earnings and employment (in an industrial/service base already at pretty serious overcapacity…  and then there are the Dead Malls.

* for more on this phenomenon and what it might mean, this post in Jon Taplin’s blog is a good place to start…  and for a peek at what could become of malls needy of a new purpose, see this post in The Infrastructuralist.

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As we cinch up our belts, we might think back to one of the driving forces that created the milieu in which malls were born and flourished: on this date in 1956 President Dwight D. Eisenhower signed the Federal-Aid Highway Act, landmark legislation that funded a 40,000-mile system of interstate roads that ultimately reached every American city with a population of more than 100,000. Today, almost 90% of the interstate system crosses rural areas, putting most citizens and businesses within driving distance of one another. Although Eisenhower’s rationale was martial (creating a road system on which convoys could travel more easily), the rewards were largely civilian. From the growth of trucking to the rise of suburbs, the interstate highway system re-shaped American landscapes and lives… and played a major role in creating the pre-conditions for the growth of the mall.

source: Missouri Department of Transportation

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