Russian economy largest in Europe

Discussion in 'The Russian Economy' started by Morgoth, Jul 3, 2013.

  1. Morgoth

    Morgoth Office Registrar (13th class)

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    I will agree that one of the valid criticisms you could make of the PISA tests is they have been running for 13 years while to properly assess how IQ changes over time and what role the "genetic ceiling" plays is something that possibly requires many decades, perhaps 40 or 50 years of testing to accurately judge.
  2. gbordakov

    gbordakov Office Registrar (13th class)

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    On a funny note (however it is not directly related to Russia) I would like to bring your attention to the Dilbert Salary Theorem stating that money is inversely proportional to knowledge for the same work done.
    Here http://www.stanford.edu/~wonghoi/pseudosci/salary.pdf you can find generalized theory which allows to make this insightful conclusion:
    "With some power, you’ll make (lose) a lot of money if your knowledge increases (decreases) by an infinitesimally small amount."
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  3. Morgoth

    Morgoth Office Registrar (13th class)

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    Interesting, I had not heard of this theory before, it is certainly an interesting to way to look as the relationship between the quantity of knowledge a person has and the ability of that person to earn money.
  4. Philip Owen

    Philip Owen Office Registrar (13th class)

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    The Flynn effect makes a nonsense of IQ comparisons. Flynn noticed that IQ scores, rose over time implying that your Grandparents were stupid. This may not be exactly the case? The S-B test is the only standardised test of any standing or duration. It requires certain patterns of thinking. If you don't have those you fail. In Zambia, people can't count well enough to handle small change, yet they cope with life just fine.

    Productivity per person ultimately defines wealth production so human capital matters more than anything else but IQ is a very imperfect way to measure it. And genetic IQ for countries! Please! There are racially pure countries? And if countries with the same racial mix diverge (Say Nigeria and Cameroon) what explanation can be offered that retains genetic inheritance as the key variable?

    Human capital is not just education. It is social attitudes as well. Russia has a good position on education but trust is low, entrepreneurialism is low, tolerance of diversity is low.

    On the measurement front, the EU uses something called Gross Value Added which is a bit more refined in that it can show productivity a bit better than GNP or GDP at the sectoral level.

    From the point of view of economic clout, PPP doesn't matter much. Unadjusted GDP tells you what Russia can pay for.
  5. Alexander Mercouris

    Alexander Mercouris Ship Secretary (11th class)

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    I don't think the comparison with Taiwan or South Korea should be taken too far. Though both are large countries they do not compare with the continental size of Russia or of its economy. It's like comparing the torque of a much bigger engine with a smaller one. Nor should one be excessively concerned about global economic conditions, though obviously they do have an impact. Russia is not a trading economy in the way that Taiwan or South Korea of necessity are. Russia's economy is like a giant flywheel. Once it starts turning it will gather its own momentum and will shape the physical environment around it.
  6. Nikita

    Nikita Office Registrar (13th class)

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    In response to the IQ thing: I don't think it matters really. I mean look at hourly productivity rates between 'genius' Asians and their more mentally challenged colleagues in Europe and North America. Japan, Korea, and Taiwan are essentially all outperformed by Western European and Northern American countries. Maybe I am just biased, but to me the people that work less and get paid more are the smarter ones.
    OECD statisitcs on productivity:
    http://stats.oecd.org/Index.aspx?DatasetCode=LEVEL
    Also, can someone please explain to me the methodology that the World Bank uses, and why its GDP PPP statistics are substantially different from the IMF or the CIA? Thanks!
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  7. Morgoth

    Morgoth Office Registrar (13th class)

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    The reason that the World Bank's data concerning GDP PPP is different from the IMF's is due to the fact that the IMF and other organizations use data based off the 2005 International Comparison Program (ICP) round whereas the World Bank updates its data more regularly and uses data obtained from say the 2008 survey of prices in Russia, the IMF and CIA will update their datasets when the 2011 ICP results are released this December so that in the April World Economic Outlook which the IMF will release in 2014, many nations GDP's will be different from what they currently in PPP terms.
  8. Reggie Kabaeva

    Reggie Kabaeva Office Registrar (13th class)

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  9. Alexander Mercouris

    Alexander Mercouris Ship Secretary (11th class)

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    Dear Reggie,

    At last some sanity on the Russian economy. This is an excellent article, which I cannot recommend too strongly. I would merely add that one of the fundamental differences between the performance of Russian stocks and those in every other major market and economy (including Brazil's and China's) is that Russian stocks have not been supported by unconventional mechanisms such as quantitative easing, which have inflated stock values elsewhere.

    I agree with the writer of the article that the combination of falling inflation (Ulyukayev is talking of a target of 4.5% inflation by mid 2014) and monetary easing should lay the groundwork for a strong recovery.

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