Category: Economy, Think Tank

Please use the comments to demonstrate your own ignorance, unfamiliarity with empirical data and lack of respect for scientific knowledge. Be sure to create straw men and argue against things I have neither said nor implied. If you could repeat previously discredited memes or steer the conversation into irrelevant, off topic discussions, it would be appreciated. Lastly, kindly forgo all civility in your discourse . . . you are, after all, anonymous.

One Response to “Wage and Price Dynamics in a Large Emerging Economy: The Case of China”

  1. ZevCapital says:

    I’m struck by the fact that economists still insist on analyzing Asian economies through Western eyes. You don’t even have to get past the abstract to realize that the authors completely misunderstand the profound problems that are coming to a head in China.
    !. China needs full employment to maintain political stability.
    2. China needs to increase wages to maintain political stability.
    3. China needs to keep prices low to maintain its position as the world’s source of cheap labor.
    The only way to keep these competing forces in check is to keep growing. Indefinite growth is not possible but when the alternative is chaos and the fragmenting of China, you will start doing things that you know you shouldn’t, like lending money to people who don’t have a chance of paying it back. (sound familiar?)
    The real conclusions the authors should be making is that falling profit margins are going to be directly to banking failures which will then lead to financial collapse and possibly the fragmentation of China.