ECON 6280 Lecture 4: ECON 6280 Class 4 Case Study of China
Document Summary
No: driven by coordination of both the government and the private sector; started development before the liberalization of the economy, less privatization of state-owned enterprises (gradualism) Labor is cheaper in china but very expensive in africa, which partially explains the level of foreign investment. The green revolution and the reallocation of labor. Regional effects -> good neighbors (japan, south korea) that china could copy and trade with. Limits: middle-income trap, high public debt/bubble, environmental crisis, lack of accountability. It does not accept migration labor force will age and have negative effects on the economy. Of the lack of a grand strategy still constraining and micromanaging the market -> the government has to let go in order to grow further (need innovation) Of the lack of accountability and democracy -> highest inequality: people are growing rich because of power and connections, but because of innovation -> there will be less and less investment because the game is rigged.
