Wednesday, July 26, 2017

How Sustainable Is This?

I don’t really know, but I’m going to enjoy it while it lasts – I’ve been re-examining global trade data for the last month or so. This is Malaysia’s (log annual and monthly changes; seasonally adjusted):

Tuesday, July 25, 2017

Growth in Context

Just a quick note:

Growth forecasts for the Malaysian economy have been undergoing upward revisions, given the strong 1Q2017 GDP numbers and the continuing strength of trade growth and retail sales. For example, the IMF has just upgraded their 2017 forecast for Malaysian GDP growth from 4.5% to 4.8%. The official government forecast of 4.3%-4.8% will also likely follow suit in the next month or so, probably around the ballpark of 5%.

One common refrain I’m hearing in all this is: the man on the street and the businessman in his office aren’t feeling it.

Friday, July 21, 2017

Before We Start Talking About “Free” Tertiary Education…

…we need to handle this little problem:


  1. Why isn’t secondary education universal yet?
  2. What’s happening with the missing boys? Malaysia’s gender ratio is tilted to more boys, yet fewer of them enter secondary education.
  3. If you think this is bad, from my memory the secondary graduation numbers are even worse (I’ll post the chart if and when I find the numbers).

Thursday, July 20, 2017

Zero-Sum Productivity

Lord Adair Turner has a lovely article on the future of productivity (excerpt):

Is Productivity Growth Becoming Irrelevant?

LONDON – As the Nobel laureate economist Robert Solow noted in 1987, computers are “everywhere but in the productivity statistics.” Since then, the so-called productivity paradox has become ever more striking….

…As we get richer, measured productivity may inevitably slow, and measured GDP per capita may tell us ever less about trends in human welfare….

…Our standard mental model of productivity growth reflects the transition from agriculture to industry….

Wednesday, July 12, 2017

Effective Exchange Rate Indexes: June 2017 Update

The NEER and REER page has been updated, as has the Google Docs version.


Over the past two months, the Ringgit has continued to gain ground, posting advances across all six indices being tracked. Most of the gains were posted in May (2.06% in the case of the real broad index), with some follow through in June (0.31%). For the latter, most of the gains were against the periphery, as the narrow index posted a small loss (-0.01% for the real narrow index). The strongest gainer was the real ASEAN index, which rose 2.34% in May and a further 0.33% in June. All told, the Ringgit has now recovered nearly all of the ground lost in the aftermath of the US presidential election.

On a bilateral basis, gains were recorded against 13 out of 15 currencies tracked in May, and 10 out of 15 in June. Across both months, the Ringgit gained against every major currency except the EUR (-1.79%), with the biggest gainer being against the JPY (+3.59%). Also, for the first time since January 2017, the REER is above the NEER, signaling a (very minor) undervaluation.



  1. Indexes have been updated to June 2017
  2. CPI deflators and forecasts have been updated for May/June 2017
  3. Trade weights have been updated to 1Q2017, which entails revisions for Jan-Apr 2017

Wednesday, July 5, 2017

Seattle’s Minimum Wage Experiment

This paper caused a stir in the economics community in the past couple of weeks (abstract):

Minimum Wage Increases, Wages, and Low-Wage Employment: Evidence from Seattle
Ekaterina Jardim, Mark C. Long, Robert Plotnick, Emma van Inwegen, Jacob Vigdor, Hilary Wething

This paper evaluates the wage, employment, and hours effects of the first and second phase-in of the Seattle Minimum Wage Ordinance, which raised the minimum wage from $9.47 to $11 per hour in 2015 and to $13 per hour in 2016. Using a variety of methods to analyze employment in all sectors paying below a specified real hourly rate, we conclude that the second wage increase to $13 reduced hours worked in low-wage jobs by around 9 percent, while hourly wages in such jobs increased by around 3 percent. Consequently, total payroll fell for such jobs, implying that the minimum wage ordinance lowered low-wage employees’ earnings by an average of $125 per month in 2016. Evidence attributes more modest effects to the first wage increase. We estimate an effect of zero when analyzing employment in the restaurant industry at all wage levels, comparable to many prior studies.