p style="text-align: left;"By Claus Vistesen: Copenhagenbr //pp style="text-align: left;"(please click on pictures for better viewing)br //pp style="text-align: left;"br //pp style="text-align: center;""Being a Keynesian means being a Keynesian in emboth/em the good and bad times."/p p style="text-align: center;"emAndres Velasco (Finance Minister in Chile) [1]/em/p pbr //ppIt has been a while since I last had a thorough look at Chile (a href="http://chileeconomy.blogspot.com/2008/10/chiles-economy-in-perspective-october.html"here/a and a href="http://chileeconomy.blogspot.com/2008/08/economic-growth-in-chile.html"here/a); more specifically, the last time I had Chile under the loop was in October 2008 and thus around the time when the global economy was about to enter two quarters (Q4-08 and Q1-09) of absolute horror. Whether we are past the worst at this point in time is debatable and I am, personally, skeptical with regards the narrative of second derivatives and green shoots, but it is hard to deny that it does represent a narrative and a fairly strong one too. In this context I thought ...

Note: This is a beta version. I will probably be going over it a couple of times before I am completely happy with it. Moreover, please note that all pictures can be seen in a bigger format by clicking on the which will open a new window or tab

---

"Being a Keynesian means being a Keynesian in both the good and bad times."

Andres Velasco (Finance Minister in Chile) [1]

It has been a while since I last had a thorough look at Chile (here and here); more specifically, the last time I had Chile under the loop was in October 2008 and thus around the time when the global economy was about to enter two quarters (Q4-08 and Q1-09) of absolute horror. Whether we are past the worst at this point in time is debatable and I am, personally, skeptical with regards the narrative of second

...

The Mankiw-DeLong inspired debate over the time series characteristics of GDP continues. [1] [2] [3] Here is a very long run (1967-2008) extension of my 1967-2008 quarterly analysis covered in this post.

Figure 1: Log real U.S. GDP, 1867-2000, in billions 2000$. Source: GDP from Johnston and Williamson, and author's calculations.

The Elliott-Rothenberg-Stock (1996) DF-GLS tests statistic (assuming constant and linear trend, lag length equal 1, selected using Schwartz Bayesian information criterion), is -3.3258. The 5%(1%) critical values are -2.988 and -3.5296. Hence, we reject the trend stationary unit root null at the 5% msl.

The Kwiatkowski-Phillips-Schmidt-Shin (KPSS, 1992) LM test statistic is 0.88306 (allowing for constant, trend, bandwidth=9, Newey-West using Bartlett kernel), where the asymptotic critical value is 0.119 for the 10% msl. Hence, we fail to reject the trend stationary null at conventional levels.

So, by the conventional statistical criteria, I would

...

By Claus Vistesen: Copenhagen

There are many perspectives through which to look at economic development and growth. Geography, institutions or perhaps just plain good old physical capital accumulation are all important parameters. This small piece suggests a further metric and attempts to frame the argument with Chile as a case study.

Specfifically, this note explains the process known as the demographic dividend and conceptualizes it in a Chilean context. The analysis shows how Chile during the last two decades has benefited from the dividend proxied by the increasingly favorable trend in overall age structure of the society. By some measures Chile’s demographic dividend is thus ending during these very years. Yet, by adapting a slightly broader definition of the optimal working age and subsequent productivity profile, it appears that Chile still finds itself in the proverbial sweet spot and will continue to do so for the next decade. Coupled with

...

By Claus Vistesen: Copenhagen

There are many perspectives through which to look at economic development and growth. Geography, institutions or perhaps just plain good old physical capital accumulation are all important parameters. This small piece suggests a further metric and attempts to frame the argument with Chile as a case study.

Specfifically, this note explains the process known as the demographic dividend and conceptualizes it in a Chilean context. The analysis shows how Chile during the last two decades has benefited from the dividend proxied by the increasingly favorable trend in overall age structure of the society. By some measures Chile’s demographic dividend is thus ending during these very years. Yet, by adapting a slightly broader definition of the optimal working age and subsequent productivity profile, it appears that Chile still finds itself in the proverbial sweet spot and will continue to do so for the next decade. Coupled with

...

Like I said in my weekend thematic summary I have been working on a country analysis/outlook for Chile. Now, why the heck am I writing about Chile now, you might ask. Clearly, some are already busy telling me to shut up all together, or to stop saying stuff about economies and regions of which, according to them, I know nothing about. I am afraid that those people won't be getting their way. I am far too nosy and curious to listen to such "suggestions".

In this first installment, I am looking at the more long term drivers of economic growth in Chile as well as I try to contextualize how demographics might assist us in our perspective on the economic facts. The background for my sudden interest in Chile (as well as in Thailand and Brazil) can be found here where Edward

...