The author has been described by News Ltd as an "iconoclast", "Svengali", a pollie's "economist muse", and "pungently accurate". Fairfax says he is a "Renaissance man" and "one of Australia’s most respected analysts." Stephen Koukoulas concludes that he is "85% right", and "would make a great Opposition leader." Terry McCrann claims the author thinks "‘nuance’ is a trendy village in the south of France", but can be "scintillating" when he thinks "clearly". The ACTU reckons he’s "an enigma wrapped in a Bloomberg terminal, wrapped in some apparently well-honed abs."

Monday, September 12, 2011

Krugman and the North Atlantic fallacy

A good video interview here with Paul Krugman referred to me by Ricardian Ambivalence. The key problem with Krugman's analysis is that he seems to forget that the G7 economies only account 49.1% of global GDP output (measured in current US dollars), according to the latest IMF data. Emerging and developing countries alone account for another 35-36% of global GDP output (and much more of global GDP growth). For what it is worth, the Euro Area is just 18.8% of output. So, we can basically have little-to-no growth in the US and Europe and still quite positive global GDP growth.