Hacker News Reader

Comment by ekianjo | Hacker News Reader

> GDP per capita has risen far more slowly in the UK than in the US and Japan (not to mention some of the faster-growing Asian economies).

Oh, I don't think you should cite Japan as any example anywhere. The financial situation over here is catastrophic, and there's not telling when the country actually hits the wall, but when it will it will hit it BAD. Demographic decline, Productivity stagnating, retirement paid by workers (less and less of them), humongous debt (spelling out default of hyper inflation in the mid term) - and a Nobel laureate should know that GDP growth is far from a good economic indicator...

> and austerity, as Keynes noted, is essentially anti-growth

Huh, does the author seriously believe that Keynes was constant in his beliefs? The guy changed his mind about many things thoughout his life: http://www.economist.com/blogs/freeexchange/2013/11/economic...

View on HN

> Oh, I don't think you should cite Japan as any example anywhere. The financial situation over here is catastrophic, and there's not telling when the country actually hits the wall, but when it will it will hit it BAD. Demographic decline, Productivity stagnating, retirement paid by workers (less and less of them), humongous debt (spelling out default of hyper inflation in the mid term)...

Wait, if the UK, which doesn't suffer from these problems quite as badly, still has lower GDP growth than a country that does, that says something bad about UK's growth. So it seems clear then that the UK has done something badly wrong.

> GDP growth is far from a good economic indicator

It should be good enough. For one thing, large systematic movements in any indicator can be used to measure things, and the indicator doesn't have to be totally precise for it to be useful.

Ah, Japan & GDP growth numbers, the perfect example :)

Are GDP numbers a good indicator of the success of economic policies? They aren't that useful if you ignore all the details.

Here is an example when comparing US and Japan GDP growth numbers:

http://research.stlouisfed.org/publications/es/article/10011

"In summary, three structural factors seem to account for the difference in GDP growth between Japan and the United States in the post-1990 period: (i) the slow population growth in Japan, (ii) the employment rate, and (iii) the decline of average hours worked in Japan from a very high level to the level in the United States. It seems useful to consider these findings when Japan’s experience is used to draw policy conclusions for the United States."

And yet we have been lectured by numerous economists (sometimes with Nobel medals on them) about the implications these raw GDP growth numbers supposedly have for economic policy.

> still has lower GDP growth than a country that does

Even if GDP was an effective indicator, the author is completely wrong about his assumptions: the GDP growth for the UK and Japan during 2000-2008 is almost identical: http://www.tradingeconomics.com/japan/gdp-growth Just add the UK at the bottom to compare, you will see both lines are on top of each other's.

Care to point us to a text written by Keynes advocating austerity in an economic downturn?

Reply on news.ycombinator.com