A world of convergence

first_imgUnderstanding the phenomenon of ‘catch-up’ growth is key to answering this question. Trade and foreign direct investment have made it much easier for emerging countries to absorb and adapt best-practice technology invented in the advanced economies. The information revolution, allowing much easier access to and diffusion of knowledge, has accelerated the process.   Catch-up growthOnce they developed the basic institutions needed for a market economy and learned how to avoid serious macroeconomic policy mistakes, emerging countries started benefiting from catch-up growth. Those with very high investment rates, mostly in east Asia, grew faster than those with lower investment rates; but, overall, catch-up growth probably has been adding 2-4 percentage points to many emerging and developing countries’ annual growth rates. At the same time, population growth decreased, adding at least another point to the pace of per-capita growth.   This process will likely continue for another decade or two, depending on where in the process particular countries are. It is true that catch-up growth is easier in manufacturing than in other sectors, a point recently emphasised by Dani Rodrik of Harvard University, and it may be that a good portion of it has been exhausted in manufacturing by the best-performing firms in emerging countries.   But there is still a lot of ‘internal’ room for catch-up growth, as less-efficient domestic firms become more competitive with more-efficient ones. The dispersion of ‘total factor productivity’ – the joint productivity of capital and labour – inside emerging countries has been found to be large. Moreover, sectors such as agriculture, energy, transport, and trade also have catch-up growth potential, through imports of technology, institutional know-how, and organisational models.   Of course, temporary disturbances, a worsening of global payments imbalances, or macroeconomic policy mistakes, including those made in advanced economies and affecting the entire world economy, could undermine global growth. But the underlying ‘convergence differential’, owing to catch-up growth, is likely to continue to reduce the income gap between the old advanced economies and emerging-market countries.  The Soviet Union never was able to build the institutions to allow for catch-up economic growth. Japan slowed down after it had basically caught up. China, India, Brazil, Turkey, and others may have firms operating close to the world’s technological frontier, but they still have a lot of unused catch-up potential.   The more that these countries can invest while ensuring macroeconomic stability and balance-of-payments sustainability, the faster they can adopt better technology and production processes. In that case, they can continue to catch up, at least for the next decade or more. The convergence process is going to slow, but not yet.   Kemal Derviş is vice-president of the global economy and development programme at the Brookings Institution, and was formerly minister of economic affairs in Turkey and executive head of the United Nations Development Programme (UNDP). © Project Syndicate, 2012. Mistaken projectionsLong-term projections based on short-term trends have often been mistaken. In the late 1950s, after the Soviet Union launched the first spacecraft, eminent Western economists predicted that Soviet income would overtake that of the United States in a few decades. After all, the Soviet Union was investing close to 40% of its GDP, twice the ratio in the West.   Later, in the 1980s, Japan’s spectacular growth led some to predict that it would overtake the US, not only in per-capita terms, but even in terms of some measures of ‘economic power’.   These kinds of projections have often been based on simple extrapolations of exponential trends. Over two or three decades, substantial differences in compound growth rates quickly generate huge changes in economic size or per-capita income.   Will the recent predictions of rapid ongoing global convergence similarly turn out to be wrong, or will most of the emerging countries sustain a large positive growth differential and get much closer to the advanced economies’ income levels?   center_img For almost two centuries, starting around 1800, the history of the global economy was broadly one of divergence in average incomes. In relative terms, rich countries got even richer. There was growth in the poorer countries, too, but it was slower than rich-country growth, and the discrepancy in prosperity between rich and poor countries increased. This ‘divergence’ was very pronounced in colonial times. It slowed after the 1940s, but it was only around 1990 that an entirely new trend could be observed – convergence between average incomes in the group of rich countries and the rest of the world. From 1990 to 2010, average per-capita income in the emerging and developing countries grew almost three times as fast as average income in Europe, north America, and Japan, compared to lower or, at most, equal growth rates for almost two centuries.   This has been a revolutionary change, but will this 20-year-old trend continue? Will convergence remain rapid, or will it be a passing phase in world economic history?   last_img read more

Read More »

Vermont Public Service Department releases 2014 Telecommunications Plan

first_imgVermont Business Magazine The Department of Public Service, in conjunction with the Agency of Commerce and Community Development and the Department of Information and Innovation, has released the final 2014 Telecommunications Plan. The Plan addresses the major ongoing developments in the telecommunications industry, including broadband infrastructure development, regulatory policy (as the non-regulated aspects keep growing), greater competition and recommendations for future action.“This Plan is the product of a rigorous public input process. The Department carefully considered the proposals made by members of the public and the telecommunications industry in response to the Department’s final draft,” said Public Service Commissioner Christopher Recchia.The final plan includes added recommendations on “make-ready” and pole attachment policy, net neutrality, and it provides a more in depth look at the cost of deploying fiber to the home to every E911 location in Vermont. The Plan calls for a prioritization of State supported projects that ensure locations with the slowest available broadband speeds receive priority for upgrades.One of the challenges the state has is with oversight.”While demand for telecommunications services are greater than ever, the state’s authority to regulate the market has waned,” the report states.It goes on to say: “When the Telecommunications Act was signed into law in 1996, the Public Switched Telephone Network (PSTN) and the Internet were nearly completely separate. Voice service over the PSTN was the only plausible definition of an “essential” service. This remained largely true at the publication of the Department’s 2004 Telecommunications Plan when competition in the telephone market was still establishing itself. But technological changes over the last 10 years have blurred the line between what is an essential service and what is not. One significant change is the use of packet switching to carry voice data in the same way that information data is transmitted.”The dominant packet switching technology, voice over Internet protocol (VoIP), has allowed a greater number of competitors to enter the voice market, such as cable and Internet content companies. Some companies provide voice service to fixed locations over internally managed Internet protocol (IP) networks, while other providers use IP technology to send voice traffic over the public Internet (nomadic VoIP). More importantly, VoIP has challenged the distinction between “telecommunications service” (or “basic service”) and an enhanced “information service.” Because federal law distinguishes between telecommunications and information services, and regulates each one differently, the rise of VoIP raises an important question about what is a telecommunications service. The transition from traditional circuit switched technology to IP technology is inevitable, and the roles that states and the national government play in this transition will be crucial to determining basic questions about quality, reach, and affordability of basic voice service in the future.”The voice telephony market has changed in other ways. Commercial Mobile Radio Service (cellular service) has become a dominate technology in the telecommunications industry over the past decade. The 2004 Telecommunications Plan survey indicated that an overwhelming majority of Vermont households (77%) had not even considered the idea of giving up their traditional landline service in favor of wireless service. Today, 29.9% of Vermont adults live in wireless-only households, and that number continues to increase as service expands and becomes more reliable.”Recent consolidation of the wireless market has resulted in four nationwide carriers offering service in Vermont. These carriers have made great inroads into rural Vermont, installing facilities in some of the hardest to reach places of the state. The result has been that Vermonters increasingly rely on their wireless devices to communicate.”Now, broadband service is nearly universal in Vermont, with availability in at 99% of locations within the state, with the remaining 1% having a “funded solution” in place.Figure 4 depicts the locations in each speed tier by county. 9% of locations (27,574) have or will have service available that meets the 2024 goal; 61% of locations (178,767) have service available that reaches 100 Mbps download and 10 Mbps upload, while this service does not meet the 2024 goal, it comes very close. At 8% of the locations (22,908), the best available service provides access at 4/1 Mbps; 22% of locations (65,816) have or will have high speed Internet access, but the best speeds are below 4/1 Mbps. This plan calls for prioritizing any state funded support by speed, starting with those locations that lack service of 4/1 Mbps or better. “The comments we received during the public and legislative review process helped us make this plan much stronger,” Recchia said, adding  “I appreciate the efforts of all those who commented and we made every effort to constructively address those comments in this final plan.”The Department held nine public hearings during the months of August and September, including one statutorily mandated hearing at the General Assembly. During this time, the Department received numerous comments suggesting Vermont adopt a revolving loan fund that would enable providers to receive loans with favorable terms to deploy broadband projects in hard to serve areas.“We carefully considered this proposal and decided a grant program will better serve hard to reach locations by making the business case for deploying infrastructure more favorable. A loan program would not likely enhance the business case for these areas.”In addition to broadband, the Plan also discusses ongoing developments in the provision of telephone and cable. In addition the Plan provides an analysis of state government telecommunications infrastructure. The Plan presents readers with an overview of the last ten years and what the State should focus on over the next ten years to ensure Vermonters have access to the best available telecommunications services. “It is our hope that this plan will help guide Vermont’s future telecommunications policy.”Source: Vermont Public Service Department. 12.4.2014. The 2014 Telecommunications Plan is available electronically at the following link: 2014 Telecommunications Plan(link is external). To receive a hard copy of the 2014 Telecommunications Plan, please contact Jim Porter at [email protected](link sends e-mail)  or (802) 828-4003.last_img read more

Read More »

Spurs rally to keep Lakers winless with LeBron

first_imgLos Angeles Lakers guard Kentavious Caldwell-Pope (left) falls as San Antonio Spurs guard DeMar DeRozan drives toward the basket during their game Monday, Oct. 22 in Los Angeles. AP LOS ANGELES – LeBron James hit the tying 3-pointer late in regulation. He led a Lakers lineup of three second-year pros and a rookie making his NBA debut to a 142-136 lead with 55 seconds left overtime.James was then reminded in spectacular fashion that nothing will be easy in this West Coast chapter of his career.Patty Mills hit a go-ahead jumper with 6.8 seconds left and the San Antonio Spurs kept the Lakers winless with LeBron, rallying from a 6-point deficit in the final minute of OT for a wild 143-142 victory Monday night.James tied it on a magisterial 3 with 2.4 seconds left in regulation, and he finished his second Lakers home game with 32 points, 14 assists and eight rebounds. But the superstar missed two free throws with 12.8 seconds to play before Mills coolly put the Spurs ahead. James then missed a step-back 3-pointer at the buzzer, thoroughly deflating Staples Center as the Lakers fell to the first 0-3 start in James’ career since his second season with Cleveland in 2004-05.After cooling down, LeBron did not seem discouraged by the Lakers’ last-minute failure against a quality opponent – and while Los Angeles was missing suspended starters Rajon Rondo and Brandon Ingram.“It’s not” discouraging, James said.“I know what I got myself into,” he added. “It’s a process. I get it, and we’ll be fine. I didn’t come here thinking we were going to be blazing, storming right out of the gate. It’s a process, and I understand that.”LaMarcus Aldridge had 37 points and 10 rebounds, and DeMar DeRozan added 32 points and 14 assists before Mills made the biggest shot. The Australian guard did it while playing Tony Parker’s traditional role on a familiar San Antonio play.“It’s always good when you make shots or make an impact,” Mills said. “Other than that shot, it was a team victory. It was a gutsy win. Everyone participated.”Kyle Kuzma had 37 points and eight rebounds for the Lakers, and Josh Hart added 20 points and 10 rebounds.James’ dramatic 3 from a full step beyond the arc capped the Lakers’ improbable rally from an 8-point deficit in the final 1:04 of regulation. The Lakers then took a 142-136 lead late in overtime with huge contributions from unsung rookie big man Johnathan Williams, who played important minutes in his NBA debut after JaVale McGee fouled out.But the Lakers sputtered and the Spurs rallied. Rudy Gay’s 3-pointer cut the Lakers’ lead to 142-141, and James missed his free throws before the jumper by Mills, who had 12 points.“It’s always fun to play close games and have them be that type of atmosphere, and overly competitive,” Aldridge said. “It was nice to get a close win. It just builds character and makes guys be more confident.” (AP)last_img read more

Read More »

Greek ghost awaits court hearing

first_img Facebook Twitter: @NeosKosmos Instagram The extradition hearing for alleged conman Loizos Michaels has been adjourned until later this month, according to a representative from the Southport Magistrate’s Court in Queensland. The Greek New Zealander, dubbed ‘the phantom’, faced Southport Magistrate’s Court on Tuesday, however the trial has been adjourned until April 20. After fleeing New Zealand part-way through a $3 million fraud prosecution in Auckland last July Michaels was caught on the Gold Coast in January. Alleged to have connections with Hells Angels’ bikies, Michaels is said to have left behind a trail of rich and famous victims in New Zealand. Victorian Police have also been investigating scores of allegations against the smooth-talking businessman from people who had lost up to $180,000 each. The 43 year-old has been remanded in custody, the Southport Magistrate Court representative told Neos Kosmos.last_img read more

Read More »