Good Paper; Poor MR Post

The key figure in the paper Cowen misrepresents is here:

Screenshot (154)
The output gap in that paper is measured by comparing GDP per capita in 1950 with GDP per capita in 1950 extrapolated from the trend established by each country from 1920 to 1938. This climbing-out-of-1940s-output-gap pattern is a much stronger explanation for economic growth 1950-1980 than a simple catch-up-based-on-low-incomes one. Though it should be noted that, for example, France, which is nearly on the trendline, grew much faster from 1945 to 1975 than at any other thirty-year period in its history, something which certainly cannot be explained by catch-up from the war alone, but must be explained via other means, the most important of which relates to greater per capita energy consumption. This fossil-fuel boom affected most countries at the time.

Note the outliers to the bottom: all the Latin American countries except Mexico, Ecuador (only in the 1970s) and Brazil (mostly in the 1970s), Turkey, the Philippines (an especially curious case, with it being occupied by the U.S. and all), South Africa (mainly resulting from its performance after 1973) and Myanmar. Communist China performs almost on trend, although Capitalist China performs way above it, while being one of the countries hardest hit from trend during the 1940s. Were Communist China capitalist, it would also have grown way above trend along with Japan and Korea. All the Southern European countries do well except Turkey (which, back then, was fairly backwards, with a much lower life expectancy than Greece). India is an especially poor performer due to very poor economic policy during the 1950s. Indonesia performs much better, especially under the New Order, though it’s still below trend due to Sukarno-era stagnation.

The trend is strongest when the countries I colored in, as well as the Black-majority countries, which I didn’t, are excluded. New Zealand’s stagnation signals its inability to adapt to a post-agricultural era.

WG is West Germany.

Author: pithom

An atheist with an interest in the history of the ancient Near East. Author of the Against Jebel al-Lawz Wordpress blog.

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