Academic papers I\’d like to see

I often have little thoughts (yes, thank you at the back there, very little indeed) and then realise that I\’ve not got the technical skills to even being researching whether they\’re true or not. I might know roughly where the basic information can be found for example, but not know how to put it together.

One that\’s buzzing around at the moment.

Currently we hear a lot that it\’s the UK\’s \”over reliance\” upon finance rather than manufacturing as in, say, Germany, that\’s causing all our problems.

However, I think I recall that Germany\’s recession has been deeper than ours.

So, wouldn\’t a simple little paper like the following be interesting?

Work out the share of each OECD (just to keep things simple) economy that is a) manufacturing and b) finance.

Look at the decline in GDP and the length of time of negative growth.

Compare and contrast the four sets of data.

I have a feeling that countries which had a larger portion of manufacturing had bigger declines in GDP.

Now that would be interesting, wouldn\’t it?

6 comments on “Academic papers I\’d like to see

  1. tricky … how to control for the policy response? perhaps us printing money etc. compared to the frugal Germans, is what explains the relative performance, rather that relative size of finance/manufacturing

  2. And I heard a SpAd type person [IPPR?] saying that a smaller financial sector could be good for UK PLC – too much reliance on one industry he said.
    I wonder if he thinks Germany should have a smaller manufacturing sector? Perhaps VW should be forced to downsize? The BBC hack didn’t ask… he just nodded in agreement.

  3. I’m not sure it would be interesting, Tim, there are too many variables. If the EU takes a hit, the manufacturers selling into the EU will be affected worse than those selling outside. Manufacturers of discretionary items will suffer more than manufacturers of essentials. Exactly the same arguments can be applied to financial services. The UK may well have a smaller decline simply because it sells essential services around the world, not because it is selling services rather than products.

    Bodo, I’m suspicious that their might be a grain of truth in that suggestion. We see in the Gulf that if a country has easy money from oil it tends not to bother doing anything else. An argument could be made that financial services are the UKs oil.

  4. The global crisis came along and shone a light on the weaknesses of each country. None of it was a surprise. Germany too reliant on manufactured exports, UK too dependent on financial services etc.

    However, in each case, its not that we should downsize our strengths, but more that governments should not pick a winner and try to strangle everything else. We are always going to have a big financial sector for historical reasons. What was wrong was thinking that nothing else mattered.

  5. Serf – it might show that Germany was relatively more reliant on manufacturing etc, but there is a leap form that to “over-reliant on”.

    To suggest that all countries should have economices whose mix of primary, manufacturing and services businesses reflected the global average is to suggest that there is no overall comparative advantage between countries across these sectors. Which seems unlikely.

    The better question would be, “To what extent does the prevalence of differential shocks to particular sectors reduce the desirable degree of specialisation.”

    It does not even seem clear that the recent shock was differentiated in that sense.

  6. This guy is a proven idiot. I have an academic paper to prove it and no, he is not allowed to see it. Only joking, it’s available @ timworstall.com.

    I mean who calls their kids tim anyway?

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