Today's @bopinion post is about how poor countries started catching up to rich ones.
It looks like decolonization just took a few decades to start working.https://bloom.bg/2yKQWGQ
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Basic econ theory says poor countries should grow faster than rich ones. But for much of the Industrial Revolution, the opposite happened. https://www.econ.nyu.edu/user/debraj/Courses/Readings/Pritchett.pdf?seq=14 … Why? Probably because the first countries to discover industrial technologies used them to conquer the others!
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But then colonial empires went away. And yet still, for the next 30 years or so, poor countries fell further behind rich ones. https://dash.harvard.edu/bitstream/handle/1/3451299/Barro_Convergence.pdf?sequence=4 … Why?? Possible reasons: 1. Bad institutions (dictators, communism, autarkic trade regimes) 2. Civil wars 3. Lack of education
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But then, starting in the 80s (for China) and the 90s (for India and Indonesia), some of the biggest poor countries got their acts together and started to catch up!pic.twitter.com/3keorSFcE6
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Global inequality began to fall.pic.twitter.com/UU3DogjQYc
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Beginning in the 1990s, poor countries started to grow faster than rich ones. The pattern intensified in the 2000s.https://www.brookings.edu/opinions/the-future-of-economic-convergence/ …
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Noah Smith Retweeted Hannes Malmberg
Outside of Africa, which was rocked by many huge wars in the 90s, the pattern was even stronger. Poor countries were catching up.https://twitter.com/HannesMalmberg1/status/1052002749762691073 …
Noah Smith added,
Hannes Malmberg @HannesMalmberg1Replying to @arvindsubraman @XSalaimartin and 2 othersI was analyzing this recently and it is striking how fast this is changing. I focused on the world outside of Africa, and it becomes very after 2000. Big question: how (if in any way) should this new fact change our models of comparative development? pic.twitter.com/wUT3r7qwN51 reply 9 retweets 28 likesShow this thread -
In the 90s, natural resource prices were low, so many resource exporters didn't get to join in the growth party. In the 00s that changed, as resource prices started rising.pic.twitter.com/soqwTTkv3X
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Then the Great Recession halted rich-country growth, but didn't halt poor-country growth.pic.twitter.com/OeSIlDNIVO
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Now, some economists are starting to entertain a wild, hopeful notion: What if the facts are finally catching up to basic economic theory??https://www.cgdev.org/blog/everything-you-know-about-cross-country-convergence-now-wrong …
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Now that growth theory finally (sort of) works, the world will be a changed place. Inequalities won't vanish for a long time. But no longer will a few rich countries get to lord it over the rest of the world. The days of colonialism are done for good. (end)pic.twitter.com/SsSmy0QagA
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