You Can’t Reform Your Way to Rapid Growth

MUST READ: Za vse papagaje (ki brez trunka lastnega pomisleka ponavljajo za mednarodnimi organizacijami, kot so OECD, IMF, EK) ali zgolj sanjače o čudežnem efektu strukturnih reform v tem članku Dietz Vollrath zelo enostavno in z mehansko formulo razloži, da vse te čudežne strukturne reforme na kratek rok nimajo efekta, ampak da delujejo na zelo zelo dolgi rok. V nekaj desetletjih lahko dvignejo rast BDP, vendar le nekoliko nad dolgoročnim povprečjem, toda kratkoročno ne dodajajo ničesar. Če želi država povečati rast BDP na kratek rok, je edini način, da nekdo začne trošiti več. In ta učinek na rast (tudi brez multiplikatorja) je nakajkrat večji od učinka kakršnihkoli masivnih strukturnih reform.

Full stop.

The Growth Economics Blog

One of the big advantages of having written this blog for a while is that I can start recycling old material. I’m going to do that in response to the small back-and-forth that Noah Smith (also here) and John Cochrane had regarding Jeb! Bush’s suggestion/idea/hope to push the growth of GDP up to 4% per year. Cochrane asked “why not?”, and offered several proposals for structural reforms (e.g. reforming occupational licensing) that could contribute to growth. Smith was skeptical, mainly of the precise 4% value. Why 4? Why not 5? Why not 3 1/3?

Oddly enough, the discussion of Jeb!’s 4% target is also a good entry point to talking about Greece, and the possibility that the various structural reforms insisted on by the Germans will manage to materially change their situation. But we’ll get to that.

First, what are the possibilities of generating 4% GDP growth in the…

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