Creative tensions between statistics and economics: The data-ink ratio SERC – Plenary Session 5...
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![Page 1: Creative tensions between statistics and economics: The data-ink ratio SERC – Plenary Session 5 Danny Quah Professor of Economics, LSE 08 August 2009.](https://reader031.fdocuments.net/reader031/viewer/2022032701/56649c935503460f9494e713/html5/thumbnails/1.jpg)
Creative tensions between Creative tensions between statistics and economics: statistics and economics: The data-ink ratioThe data-ink ratio
SERC – Plenary Session 5Danny QuahProfessor of Economics, LSE08 August 2009
![Page 2: Creative tensions between statistics and economics: The data-ink ratio SERC – Plenary Session 5 Danny Quah Professor of Economics, LSE 08 August 2009.](https://reader031.fdocuments.net/reader031/viewer/2022032701/56649c935503460f9494e713/html5/thumbnails/2.jpg)
Creative tensions… Creative tensions… outsideoutsideGlobal economic crisis: “Spread
the joy, feel the burn”◦Finance and macroeconomics◦Asset pricing and economic
fluctuations
Examples:1.Global imbalances2.BRICs in the evolving global
economic landscape3.Global growth and poverty
Creative tensions - statistics and economics D. Quah 2
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1. Global imbalances1. Global imbalancesGlobal savings glut, Asian thriftFlood of cheap capital onto world
marketsEver-more innovative, extreme
financial engineering“Asymmetric obligations”
Causality?
Creative tensions - statistics and economics D. Quah 3
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US trade deficit and a GDPUS trade deficit and a GDP
Creative tensions - statistics and economics D. Quah 4
0
200
400
600
800
1000
1200
1980 1985 1990 1995 2000 2005
Billions US$
US Trade Deficit
India GDP
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US trade balanceUS trade balance
Creative tensions - statistics and economics D. Quah 5
-300
-250
-200
-150
-100
-50
0
1980q1 1985q1 1990q1 1995q1 2000q1 2005q1
US trade balance
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US-China bilateral trade US-China bilateral trade balancebalance
Creative tensions - statistics and economics D. Quah 6
-80
-70
-60
-50
-40
-30
-20
-10
0
10
1980q1 1985q1 1990q1 1995q1 2000q1 2005q1
US bilateral trade balance
China
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US bilateral trade balanceUS bilateral trade balance
Creative tensions - statistics and economics D. Quah 7
-80
-70
-60
-50
-40
-30
-20
-10
0
10
1980q1 1985q1 1990q1 1995q1 2000q1 2005q1
US bilateral trade balance
China
Oil exporters
EU
![Page 8: Creative tensions between statistics and economics: The data-ink ratio SERC – Plenary Session 5 Danny Quah Professor of Economics, LSE 08 August 2009.](https://reader031.fdocuments.net/reader031/viewer/2022032701/56649c935503460f9494e713/html5/thumbnails/8.jpg)
US bilateral trade balanceUS bilateral trade balance
Creative tensions - statistics and economics D. Quah 8
-80
-70
-60
-50
-40
-30
-20
-10
0
10
1980q1 1985q1 1990q1 1995q1 2000q1 2005q1
US bilateral trade balance
China
Oil exporters
EU
Oil+EU
![Page 9: Creative tensions between statistics and economics: The data-ink ratio SERC – Plenary Session 5 Danny Quah Professor of Economics, LSE 08 August 2009.](https://reader031.fdocuments.net/reader031/viewer/2022032701/56649c935503460f9494e713/html5/thumbnails/9.jpg)
2. BRICs2. BRICsGrowth, convergenceβ, σ convergence; unit roots,
cointegration; convergence clubs; dynamic distributions
It’s just “Brazil, Russia, India, China” (Goldman Sachs thought leadership)◦“The rise of the rest”◦“The Asian century/hemisphere”
Creative tensions - statistics and economics D. Quah 9
![Page 10: Creative tensions between statistics and economics: The data-ink ratio SERC – Plenary Session 5 Danny Quah Professor of Economics, LSE 08 August 2009.](https://reader031.fdocuments.net/reader031/viewer/2022032701/56649c935503460f9494e713/html5/thumbnails/10.jpg)
Shifts in the global Shifts in the global economy’s centre of gravity economy’s centre of gravity … in flat world… in flat world
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Shifts in the global Shifts in the global economy’s centre of gravity economy’s centre of gravity … in flat world… in flat world
Creative tensions - statistics and economics D. Quah 11
![Page 12: Creative tensions between statistics and economics: The data-ink ratio SERC – Plenary Session 5 Danny Quah Professor of Economics, LSE 08 August 2009.](https://reader031.fdocuments.net/reader031/viewer/2022032701/56649c935503460f9494e713/html5/thumbnails/12.jpg)
Shifts in the global Shifts in the global economy’s centre of gravity economy’s centre of gravity … in flat world… in flat world
Creative tensions - statistics and economics D. Quah 12
![Page 13: Creative tensions between statistics and economics: The data-ink ratio SERC – Plenary Session 5 Danny Quah Professor of Economics, LSE 08 August 2009.](https://reader031.fdocuments.net/reader031/viewer/2022032701/56649c935503460f9494e713/html5/thumbnails/13.jpg)
Shifts in the global Shifts in the global economy’s centre of gravity economy’s centre of gravity … in flat world… in flat world
Creative tensions - statistics and economics D. Quah 13
![Page 14: Creative tensions between statistics and economics: The data-ink ratio SERC – Plenary Session 5 Danny Quah Professor of Economics, LSE 08 August 2009.](https://reader031.fdocuments.net/reader031/viewer/2022032701/56649c935503460f9494e713/html5/thumbnails/14.jpg)
3. Global growth and 3. Global growth and inequalityinequalityTradeoff between growth and
inequality? (Kuznets curve, Okun leaky bucket)
Cross section? Time series? Panel?
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World growth and povertyWorld growth and poverty
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World growth and povertyWorld growth and poverty
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World growth and povertyWorld growth and poverty
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World growth and povertyWorld growth and poverty
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ConclusionsConclusionsDiscussion on methodology… but
also substantive examplesOur methods come up short on
the really big questions, those observable from outer space
Edward Tufte’s data/ink ratioWhat is our value/statistic ratio?
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Creative tensions between Creative tensions between statistics and economics: statistics and economics: The data-ink ratioThe data-ink ratio
SERC – Plenary Session 5Danny QuahProfessor of Economics, LSE08 August 2009