Latin america s bicentenary and the maddison legacy maddison memorial conference l.jpg
This presentation is the property of its rightful owner.
Sponsored Links
1 / 42

Latin America’s Bicentenary and the Maddison Legacy Maddison Memorial Conference PowerPoint PPT Presentation


  • 305 Views
  • Updated On :
  • Presentation posted in: Travel / Places

Latin America’s Bicentenary and the Maddison Legacy Maddison Memorial Conference. Andr é Hofman - Director CEPAL Review Economic Commission for Latin America and the Caribbean Amsterdam, November 2010. Outline. Introduction.

Related searches for Latin America’s Bicentenary and the Maddison Legacy Maddison Memorial Conference

Download Presentation

Latin America’s Bicentenary and the Maddison Legacy Maddison Memorial Conference

An Image/Link below is provided (as is) to download presentation

Download Policy: Content on the Website is provided to you AS IS for your information and personal use and may not be sold / licensed / shared on other websites without getting consent from its author.While downloading, if for some reason you are not able to download a presentation, the publisher may have deleted the file from their server.


- - - - - - - - - - - - - - - - - - - - - - - - - - E N D - - - - - - - - - - - - - - - - - - - - - - - - - -

Presentation Transcript


Latin america s bicentenary and the maddison legacy maddison memorial conference l.jpg

Latin America’s Bicentenary and the Maddison LegacyMaddison Memorial Conference

André Hofman - Director CEPAL Review

Economic Commission for Latin America and the Caribbean

Amsterdam, November 2010


Outline l.jpg

Outline

  • Introduction.

  • Bicentenary Latin America: Economic growth in the very long run, 1500-2010.

  • Growth and Productivity in Latin America, 1950-2010: Growth accounting .

  • Growth and Productivity in Latin America, 1990-2010: LA-KLEMS.

  • Final remarks.


Introduction l.jpg

Introduction

  • This presentation is about growth and productivity in Latin America and the influence of the work of Angus Maddison in research on growth and productivity in Latin America and some future research indications.

  • It is partially based on a article Angus and I were preparing ¨Latin America’s Bicentenary: Long run performance in an international comparative perspective, 1500-2010¨, but it contains also some new elements related with growth and productivity in Latin America.


Introduction cont l.jpg

Introduction (cont.)

3 periods of analysis in Latin America. All periods end with 2010 but in each subsequent period new analytical and empirical tools are introduced.

The periods are:

1500-2010 Bicentenary Latin America - Economic growth and productivity in the very long run.

1950-2010 Growth and productivity in Latin America: Growth accounting.

1990-2010 Disaggregated growth and productivity in Latin America: The LA-KLEMS approach.

Important characteristic is the systematic use of quantitative evidence in a macroeconomic - national accounts - framework.


Bicentenary latin america economic growth and productivity in the very long run 1500 2010 l.jpg

Bicentenary Latin America - Economic growth and productivity in the very long run, 1500-2010.


Bicentenary latin america economic growth and productivity in the very long run 1500 20106 l.jpg

Bicentenary Latin America - Economic growth and productivity in the very long run, 1500-2010.

Benchmarks 1500, 1820, 1870, 1913, 1950, 1973.

1500-1820 Extensive growth in Latin America, discovery, conquest and destruction.


Bicentenary latin america economic growth and productivity in the very long run 1500 20107 l.jpg

Bicentenary Latin America - Economic growth and productivity in the very long run, 1500-2010.

1820-1870 Independence period in Latin America. Very low growth in comparison with rest of the world.

1870-1913 Rapid growth in the world and also in Latin America. Foreign direct investment and international trade.

1913-1950 Faster growth in Latin America compared to the world economy. Growth was faster in part because of internal production capacity expanded as WW and crisis made import substitution necessary.


Table 1 levels of per capita gdp and interregional spread 1500 2008 1990 international dollars l.jpg

Table 1LEVELS OF PER CAPITA GDP AND INTERREGIONAL SPREAD, 1500 - 2008(1990 international dollars)

Source: Maddison (2001).


Table 2 levels of per capita gdp and interregional spread 1500 2008 1990 international dollars l.jpg

Table 2LEVELS OF PER CAPITA GDP AND INTERREGIONAL SPREAD, 1500 - 2008(1990 international dollars)

Source: Maddison and Hofman (forthcoming).


Table 3 latin america total gdp 1500 2008 average annual growth rate l.jpg

Table 3LATIN AMERICA: TOTAL GDP, 15002008(average annual growth rate)

Sources: Maddison and Hofman (forthcoming).


Table 4 population 1500 2008 million l.jpg

Table 4 Population, 1500 - 2008(million)

Source: Maddison and Hofman (forthcoming).


Bicentenary latin america economic growth and productivity in the very long run 1500 201012 l.jpg

Bicentenary Latin America - Economic growth and productivity in the very long run, 1500-2010.

Research agenda.

Level of Latin American population at conquest is still a very controversal theme. Angus took a relatively conservative stance with the estimate of 18 million. Estimates alone for Central Mexico ranged from 4.5 million to 100 million. Future research is needed to narrow this range.

More research needed on colonial heritage, new institutional set-up after independence, economic growth in specific countries. Reference to Bértola and ECLAC project on the bicentenary.


Growth and productivity in latin america 1950 2010 growth accounting l.jpg

Growth and productivity in Latin America, 1950-2010: Growth accounting.


Table 5 ultimate and proximate elements explaining per capita gdp performance l.jpg

Table 5 ULTIMATE AND PROXIMATE ELEMENTS EXPLAINING PER CAPITA GDP PERFORMANCE

National institutions, ideologies, pressures of socio-economic interest groups, historical accidents, and domestic economic policy

Nature of the international economic order, exogenous ideologies, pressures or shocks from friendly or unfriendly neighbours

Y(N’ L’ K’) E + A

D P

= f

Y = gross domestic product.

D = population.

N’ = natural resources augmented by technical progress.

L’ = human capital, i.e. labour input augmented by investment in

education and training.

K’ = stocks of physical capital augmented by technical progress.

E = efficiency of resource allocation.

A = net flow of goods, services, production factors, and technology from

abroad.


Growth accounting l.jpg

Growth accounting

The basic framework of growth accounting makes it possible to measure how much increases in inputs and technological progress contribute to economic growth. The starting point for such an analysis is a Cobb-Douglas production function with constant returns to scale in which GDP (Y) is defined as a function of multifactor productivity (A) and factor inputs (capital, K, and labour, L):

Where Z and H are the quality indices for capital and labour, respectively. H is an index for the quality of the labour force based on educational level.


Growth accounting16 l.jpg

Growth accounting

Taking logs and differentiating with respect to time, and assuming perfect competition, Solow (1957) shows how estimates of the share of factor inputs in GDP can be used to weight the contribution of the rate of increase in inputs to arrive at simple estimates of MFP growth as a residual. Nonetheless, Solow’s estimated residuals are quite sensitive to modifications in factor inputs, in respect of both their level of utilization and their quality.

Assuming zero adjustment costs for capital accumulation and perfect competition in factor markets, so that the payment received by each of them is equal to their social marginal product.

By applying logarithms and derivatives we obtain the standard estimate for MFP growth:


Stylized facts on economic growth in latin america 1950 2005 l.jpg

Stylized facts on economic growth in Latin America (1950-2005)

The growth of economic activity (measured by per capita GDP) in Latin America during the period 1950-2005 shows, among other things, two notable characteristics:

the presence of breaks in the long-term trend, as can be seen when comparing country growth with a constant growth trend, and

the heterogeneity of per capita GDP, which translates into disparities in their respective levels, as well as on the growth rates from the second half of the twentieth century on.


Stylized facts on economic growth in latin america 1950 200518 l.jpg

Stylized facts on economic growth in Latin America (1950-2005)

In the past half-century, Latin America has seen very strong fluctuations in its growth pattern and in the contribution of the various factors to growth.

Possible causes include low capital formation and fluctuations of productivity. In particular, MFP growth has shown sharp variations since the 1980s; when it appears to have fallen, and then stagnated.


Stylized facts on economic growth in latin america 1950 200519 l.jpg

Stylized facts on economic growth in Latin America (1950-2005)

PER CAPITA GDP IN LATIN AMERICA, 1950-2005

(1950 = 100)


Slide20 l.jpg

A comparison of per capita GDP levels in 1950 with those for 2005 shows no drastic differences in ranking, with a few exceptions.


Stylized facts on economic growth in latin america l.jpg

Stylized facts on economic growth in Latin America

Per capita GDP trend Per capita GDP region

PER CAPITA GDP IN LATIN AMERICA, 1950-2005

(1950 = 100)


Stylized facts on economic growth in latin america22 l.jpg

Stylized facts on economic growth in Latin America

Per capita GDP trend Per capita GDP region

PER CAPITA GDP IN LATIN AMERICA, 1950-2005

(1950 = 100)


Stylized facts on economic growth in latin america23 l.jpg

Stylized facts on economic growth in Latin America

Per capita GDP trend Per capita GDP region

PER CAPITA GDP IN LATIN AMERICA, 1950-2005

(1950 = 100)


Growth accounting24 l.jpg

Growth accounting


Growth accounting25 l.jpg

Growth accounting


Growth accounting26 l.jpg

Growth accounting


Growth and productivity in latin america 1950 2010 growth accounting27 l.jpg

Growth and productivity in Latin America, 1950-2010: Growth accounting.

Lessons:

Inward orientation was maintained to long. Latin America did not catch-up and did not take advantage of available technological progress. Very low TFP. Crisis of the 1980s was profound and caused lost decade.

Latin America lost competitiveness in world markets and became a natural resources exporter.


Growth and productivity in latin america 1950 2010 growth accounting28 l.jpg

Growth and productivity in Latin America, 1950-2010: Growth accounting.

Research agenda

Include capital services

Measures of capacity utilization

Potential output


Growth and productivity in latin america 1990 2010 la klems l.jpg

Growth and productivity in Latin America, 1990-2010: LA-KLEMS.


Slide30 l.jpg

Disaggregated growth and productivity in Latin America 1990-2010: LA-KLEMS - Productivity analysis and the role of ICT in Latin America: Argentina, Brazil, Chile and Mexico.


Growth and productivity in latin america 1990 2010 la klems31 l.jpg

Growth and productivity in Latin America, 1990-2010: LA-KLEMS.

  • New element: analysis of economic growth and productivity on the sectoral level (31 sectors).

  • Four Latin American countries: Argentina, Brazil, Chile and Mexico.

  • 18 variables in human capital.

  • 7 types of fixed capital formation.

  • Contribution of ICT.


Growth accounting brasil l.jpg

Growth accounting - Brasil


Growth accounting chile l.jpg

Growth accounting - Chile


Growth accounting m xico l.jpg

Growth accounting - México


Including hours worked in productivity analysis l.jpg

Including hours worked in productivity analysis

Brasil

Argentina

Chile

México


Table 11 labour productivity per hour compared to usa usa 100 l.jpg

Table 11 Labour productivity per hour compared to USA(USA=100)

Fuentes: LA-KLEMS basado en estimación de horas trabajadas y datos de ocupados/puestos de trabajo


World klems l.jpg

World-KLEMS

LA-KLEMS is part of the WORLD-KLEMS project to promote international comparisons of economic growth and productivity at the sectoral level.

Participating countries: 25 countries of EU, Australia, Canada, Japan, South Korea and USA.

Extend to developing countries: Argentina, Brasil, Chile, China, India, Indonesia, Mexico, Rusia, Taiwan and Turkey.


Growth and productivity in latin america 1990 2010 la klems39 l.jpg

Growth and productivity in Latin America, 1990-2010: LA-KLEMS.

Research agenda

Include not registrated sector (informal)

Structural change (between sectors)

Structural heterogeneity (within sectors)

Relation between sector, age groups, education and income


Growth and productivity in latin america 1990 2010 la klems40 l.jpg

Growth and productivity in Latin America, 1990-2010: LA-KLEMS.

Latin America crises in 2009.

Institutional set up relatively good (e.g. financial sector).

Terms of trade will remain positive as well as demand for Latin American natural resources.

Macro fundamentals ok but now micro reforms are needed and sectoral productivity analysis is an important input in economic policy analysis.


Summary and conclusions l.jpg

Summary and conclusions

Maddison contributions and future research:

-Long term growth analisis: contribution Angus enormous. Latin America in world perspective. Definition of benchmarks in Latin America, analysis in time an starting point in 1500. Future work: Long term growth, improve country detail, refine pre-conquest population estimates.

-Medium term analisis: contributed through incorporation of more explanatory variables and growth accounting framework. Future research: Growth accounting, methodological innovations: capital services, MFP analysis.

-Actuality: work iniated by Angus and Groningen Growth and Development Centre: LA-KLEMS disaggregated growth accounts and more detailed explanatory analisis.


Latin america s bicentenary and the maddison legacy maddison memorial conference42 l.jpg

Latin America’s Bicentenary and the Maddison Legacy.Maddison Memorial Conference

Muchas gracias.


  • Login