Sunday 14 February 2010
I came across this article on China on the CNN money site and found it remarkable for containing, in my opinion, the highest density (and maybe the highest absolute number) of errors of economics analysis in any article written by (presumably) specialist economic reporters that I have ever seen!! There is hardly anything at all here I would agree with!! For those of you are interested why, I will post my lecture notes on transition economies on the Moodle page (macro section), and after reading both please feel free to comment. What do you think; could China escape the effects of an asset price implosion by controlling prices?
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i guess the intuition is just the other way around (repressed deflation)? so if there's a pop but real estate prices are frozen to remain above market level, no one would buy real estates, or maybe just engage in some sort of informal trade (like swapping houses in cuba)? and if price controls were abandoned, you'd still have the price implosion? however, i can't see what the implicit tax here is? the opportunity costs of postponed deflation?
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i really like the lecture notes on transition facts though.. highlights the issues (or uselessness?) of growth acceleration approach. the part on the reliability of gdp data is particularly scary.