Atanu Dey On India's Development

Weekend links: Stuff worth a look

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A couple of links. One video lecture by David Weinberger. One excellent article by James Fallows.

  • From here (audio and video). “Best-selling author and Harvard Professor, Dr. David Weinberger, delivers the 2008 Bertha Bassam Lecture entitled “Knowledge at the End of the Information Age”. He provides insight into the impact of the internet on how we learn and what we know. Weinberger is recognized for his critically acclaimed book “Everything is Miscellaneous: The Power of the New Digital Disorder”.”

  • James Fallows asks the $1.4 trillion question, “The Chinese are subsidizing the American way of life. Are we playing them for suckers—or are they playing us?” (The Atlantic, Jan 2008.)

    Through the quarter-century in which China has been opening to world trade, Chinese leaders have deliberately held down living standards for their own people and propped them up in the United States. This is the real meaning of the vast trade surplus—$1.4 trillion and counting, going up by about $1 billion per day—that the Chinese government has mostly parked in U.S. Treasury notes. In effect, every person in the (rich) United States has over the past 10 years or so borrowed about $4,000 from someone in the (poor) People’s Republic of China. Like so many imbalances in economics, this one can’t go on indefinitely, and therefore won’t. But the way it ends—suddenly versus gradually, for predictable reasons versus during a panic—will make an enormous difference to the U.S. and Chinese economies over the next few years, to say nothing of bystanders in Europe and elsewhere.

  • viveksh

    Note that adjusting down by $365B / year (the trade surplus of $1B / day cited above) is not a lot for the US economy. The savings rate in the US was 0 and has shot up to 6.7% this year. That percentage of the GDP is ~ $1T / year.

    “Chinese leaders have deliberately held down living standards for their own people” – that is the real problem and it amounts to keeping the yuan low against the dollar. The implications of sudden changes are way larger on China that on US contrary to popular opinion.