On The Nature and Causes of The Wealth of Nations, 2007/08 A. Erinç Yeldan Bilkent University IDEAs...
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Transcript of On The Nature and Causes of The Wealth of Nations, 2007/08 A. Erinç Yeldan Bilkent University IDEAs...
On The Nature and Causes of The Wealth of Nations, 2007/08
A. Erinç YeldanBilkent UniversityIDEAs Network
“something significant has changed in the way capitalism has been working since about 1970”
David Harvey, 1989
Changes in the Global Environment
• economic limits of Fordist production and mass consumption have been reached by the 1970s.
• Profit rates in manufacturing in US and elsewhere started to decline as capital intensities increased
Source: Moseley, Monthly Review, 2003
“Symbol tick = ‘MAN’ country ‘TURK” cusip = 56418H100” isin = ‘TURK56418H1005’ / symbol sign - change = ‘+’ caltype = ‘percent’ 2.5 / change price value = ’44.52’.”
If you are still reading the above sentence, you are already too late!
1996 2003 2007 2008E 2009F
External Private Flows, Net 161.4 236.7 928.6 465.8 165.3
Equity Investment Net 128.6 138.5 296.1 174.1 194.8
Resident Flows, Net1123.7 -49.0 -384.4 -421.9 -271.7
Changes in Reserves ("-" indicates increase of reserves)
-90.4 -272.5 -948.7 -444.3 -245.9
Note:
Current Account Balance -83.6 128.5 434.0 387.4 322.8
As % of GDP -1.7 1.9 3.2 2.5 2.2Total Foreign Reserves (excl. gold)
311.8 1,250.9 3,705.3 4,094.6 4,446.6
Total External Debt 2,230.2 3,662.5 3,884.0 3,989.2
E: Estimate; F: Forecast1: Including gold, other monetary lending and errors and omissions.Source: Institute of International Finance, January 2009.
Emerging market economies net external financing(Billions US Dollars)
0
500
1,000
1,500
2,000
2,500
3,000
3,500
4,000
4,500
5,000
1996 2003 2004 2005 2006 2007 2008g 2009T
Net Private Capital Inflows, External Debt and Gross Reserves in the Developing Economies (Billion US$)
Total International Reserves
Total External Debt
Net Private Capital Inflows
Source: Wolff and Resnick, 2006, Advances in Marxist Theory
USA: Labor Productivity and Real Wages, 2000-2005
90
95
100
105
110
115
120
2000 2001 2002 2003 2004 2005
USA Median real hourly wages
USA Labor Productivity - Output per hour in thebusiness sector
Source: EconomicPolicy Institute
Turkey: Labor Productivity and Real Wages, 2000-2006
40
60
80
100
120
140
160
180
2000.I 2000.III 2001.I 2001.III 2002.I 2002.III 2003.I 2003.III 2004.I 2004.III 2005.I 2005.III 2006.I 2006.III
Labor Productivity (per hour worked)
Real Wage Earnings per Labor Employed (per hour)
-30
-20
-10
0
10
20
30
40
50
%
Rate of Depreciation in Selected EMEs
Argentina Brazil Hungary
Korea Mexico Poland
Romania Thailand Turkey
100
110
120
130
140
Inflation Rate, CPI (2006 Jan=100)
Argentina BrazilHungary KoreaMexico PolandRomania ThailandTurkey
90
95
100
105
110
115
120
125
Q1 2006 Q2 2006 Q3 2006 Q4 2006 Q1 2007 Q2 2007 Q3 2007 Q4 2007 Q1 2008 Q2 2008 Q3 2008 Q4 2008
Industrial Production (2006 Q1=100 )
Argentina Hungary Korea
Mexico Poland Romania
Turkey
0.0
2.0
4.0
6.0
8.0
10.0
12.0
14.0
16.0
18.0
20.0
Unemployment Rate Selected EMEs
Hungary Korea Mexico
Poland Romania Thailand
Turkey Argentina Brazil
Revised Growth ProjectionsOLD NEW
2008 2009 2008 2009
IMF, World 3.9 3.0 3.7 2.2
IMF, Turkey 4.0 3.2 3.8? 2.3?
Morgan Stanley, Turkey 2.7 2.5 2.3 1.9
CBRT 3.3 2.7
Revised Growth Projections2008 January 2008 November 2009 january
2008 2009 2008 2009 2009
IMF, World 4.5 4.0 3.8 2.2 0.5
IMF, Turkey 4.0 3.2 3.8? 2.3?
Morgan Stanley 2.7 2.5 2.3 1.9
CBRT 3.3 2.7 -0.5
Lessons
“ the argument that ‘this time things are different’ is a statement that can only be made by fools that fail to take any lessons from history...”
Kenneth Rogoff, IMF Chief Economist, 2005
