RES: [lbo-talk] Recent Growth & Bush's Economic Policy

Alexandre Fenelon afenelon at zaz.com.br
Tue Dec 23 17:54:37 PST 2003


-----Mensagem original----- De: lbo-talk-admin at lbo-talk.org [mailto:lbo-talk-admin at lbo-talk.org]Em nome de uvj at vsnl.com Enviada em: terça-feira, 23 de dezembro de 2003 22:00 Para: lbo Assunto: Re: [lbo-talk] Recent Growth & Bush's Economic Policy

I will combine the reply to Jim and Alexandre.-Ulhas

Devine, James wrote:

Roach says, "Over the 1995-2002 period, the United States accounted for 96% of the cumulative increase in world GDP - basically three times its 32% share in the global economy." This must be due higher relative growth rates in the US compared with growth rates in Japan and Europe. There is no evidence in Roach's analysis that the US has benefited at the cost of the rest of world.

Ulhas

-And how could they have financed the growing current account defict withouth the savings of the rest of world? And don´t remember that in that period many 3rd world countries followed programs of financial liberalization that have resulted in massive wealth transfers to the central countries. Curiously, those countries which remained more or less immune to the recurrent crisis of peripheral capitalism were those who limited financial liberalization (India and China). -On the other hand, I think there is something wrong with Roach analysis. The US economy grew by 3,5%/year from 1995-2002 (approximated). Multiply this to 32% and you will have 1,12% yearly growth. If US growth was 96% of worldwide growth, then the world economy was growing by 1,16% an year? Certainly this is not true and this 96% illusion is probably the result of the use of raw currency exchange rates, and as many countries in the world suffered currency devaluation (nominal Brazilian GDP in dollars fell by 60% from 1995-2002, despite a economic growth close to 20% in the same period) this will have the false impression that US was responsible by 96% of economic growth. A better estimate is close to 50%, I think. On the other hand, much of the superiority of economic growth of USA as related to Japan and Europe is due to demography. USA population grows faster, so it gives a higger economic growth, while per capita growth is only marginally superior to that from Europe.
> From my
point the better performance of USA economy is largely due to the dollar hegemony and withouth this it would be impossible to keep their current expansionist monetary policies. Is there any similarity with any other hegemonic power in the last 2000 years???

Alexandre

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