Accounting for Growth: Comparing China and India

We compare the recent economic performances of China and India using a simple growth accounting framework that produces estimates of the contribution of labor, capital, education, and total factor productivity for the three sectors of agriculture, industry, and services as well as for the aggregate economy. Our analysis incorporates recent data revisions in both countries and includes extensive discussion of the underlying data series. The growth accounts show a roughly equal division in each country between the contributions of capital accumulation and TFP to growth in output per worker over the period 1978-2004, and an acceleration of growth when the period is divided at 1993. However, the magnitude of output growth in China is roughly double that of India at the aggregate level, and also higher in each of the three sectors in both sub-periods. In China the post-1993 acceleration was concentrated mostly in industry, which contributed nearly 60 percent of China’s aggregate productivity growth. In contrast, 45 percent of the growth in India in the second sub-period came in services. Reallocation of workers from agriculture to industry and services has contributed 1.2 percentage points to productivity growth in each country.

Rebalancing the US Economy in a Postcrisis World

The objective of this paper is to explore how the external balance of the United States (US) might evolve in future years as the economy emerges from the recession. We examine the issue from the domestic perspective of the saving and investment balance and from the external side in terms of the basic determinants of exports and imports and the role of the real exchange rate. Using these two respective perspectives, we highlight (1) causes and consequences of low private and public saving in the US, and (2) sensitivity of trade to variations in the real exchange rate. We highlight the need for sustained depreciation of the dollar to improve the competitiveness of US exports and argue that the current exchange rate is consistent with a significant reduction in the size of the trade deficit. However, the favorable external outlook is very inconsistent with a projected domestic situation of low rates of private saving and a very large public sector budget deficit matched by a cyclically depressed rate of investment. Changes in US corporate tax structure, reconsideration of capital controls, and perhaps some further decline in the level of real exchange rates could help soften the impact of a potentially very hard postrecession landing for the United States.savings rate, exchange rate policy

Economic Growth in East Asia: Accumulation versus Assimilation

macroeconomics, Economic Growth, East Asia, Accumulation, Assimilation

Trading with Asia’s Giants

The United States large and sustained trade deficit with Asia raises concerns in the United States about its competitiveness in the region. The purpose of this paper is to examine the patterns of U.S. trade relationships with China and India, and the factors that are influencing their evolution. In contrast to the current public policy debate, the discussion largely addresses how these two economies compare as markets for U.S. exporters. This paper begins by noting that U.S. exports to both countries do appear low relative to the performance of Japan and the EU-15. We examine potential explanations for the weak exports from three different perspectives. First, we analyze the composition of U.S. exports to these economies, and consider how this mix of products compares to those which it appears to be competitive in exporting to the rest of the world. Second, we examine the role of multinational corporations in facilitating the trade flows between the U.S and these two economies. Finally, we employ the use of gravity equations to examine the bilateral trade patterns while controlling for a variety of country specific characteristics, such as distance. In this context, we are also able to analyze the pattern of trade in services as well as the more traditional focus on goods trade.China, India, United States, trade, and exports

Returns on FDI: Does the U.S. Really Do Better?

According to the U.S. external accounts, U.S. investors earn a significantly higher rate of return on their foreign investments than foreigners earn in the United States. This continued strong performance has produced a positive net investment income balance despite the deterioration in the U.S. net asset position in recent years. We examine the major competing explanations for the apparent differential between the rates of return. In particular, almost the entire difference occurs in FDI, where American firms operating abroad appear to earn a persistently higher return than that earned by foreign firms operating in the U.S. We first review a number of explanations in the literature for this differential. We then offer some new evidence on the role of income shifting between jurisdictions with varying rates of taxation. Using country-specific income and tax data, we find that about one-third of the excess return earned by U.S. corporations abroad can be explained by firms reporting "extra" income in low tax jurisdictions of their affiliates.

The running performance profile of elite gaelic football match-play

The current study examined (a) the match running performance of Gaelic football and (b) the decrement in match running performance with respect to position. Global positioning satellite system technologies (4-Hz; VX Sport) were used with 3 elite intercounty teams across 3 full seasons with 250 full game data sets collected. Game movements were classified according to game actions and distance covered across speed zone thresholds (total distance [TD], high-speed running distance [HSRD; ≥17 km·h], sprint distance [SD; ≥22 km·h]; accelerations [n]; peak speed [km·h]). The influence of running performance in each quarter on the subsequent quarter was analyzed across all positional roles. The mean (±SD) TD and HSRD covered during the game were 8,889 ± 1,448 m and 1,596 ± 594 m, respectively. Results show a temporal profile for TD with reductions in the second (-4.1%), third (-5.9%) and fourth (-3.8%) quarters, respectively. There was a significant reduction in HSRD in the second (-8.8%), third (-15.9%), and fourth (-19.8%) quarters when compared to the first quarter (p \u3c 0.001). Positional differences were observed for distance-based measures with the middle 3 positions (half-back, midfield, and half-forward) completing the highest running performances. These positions also showed increased decrements in TD and HSRD and SD across quarters. The current data indicate a reduction in exercise intensity over the duration of elite Gaelic football match-play. It is unclear if this reduction is because of fatigue, pacing, contextual factors, or nutritional strategies employed by players