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October 20, 2010



"In this sense, the US and Japan have both been efficient equilibria - overconfidence works well in a dynamic economy; shame works better in a stable one. " ...

So what about the UK?

Tim Worstall

I've long held entirely contradictory vauge ideas about Japan.

The first is that it has actually had deflation: so while nominal GDP doesn't seem to have moved much, life it's lived by Japanese seems to have been getting better and that same old steady rate of 1-2% a year in real terms. No, I wouldn't want to have to prove those figures.

The second is a wilder explanation: looking at growth as a micro phenomenon. When you're bheind the production frontier it's not all that difficult to grow: bring more people into the labour force, work them for longer etc. Throw more resources in.

However, when you're at that production frontier then growth is more determined by invention and innovation: what news ways of adding value are developed and spread through the economy? And Japan is pretty much at that technological frontier of current knowledge: and perhaps a socially static society cannot, at least not at the same rate, produce and utilise those new inventions as fast as a much more socially dynamic one?

And there's why the ideas are contradictory: Japan can't grow and it has been growing.


I gather that if you adjust for Japan's aging population their growth rate is in line with other developed countries. Perhaps you compare GDP per working age person?

Harmonious Jim

The WEIRD paper is fascinating. Thanks for the pointer. I too was struck by their claim that such a seemingly basic visual illusion is not universal. Shown this puzzle, the Kalahari foragers must be thinking what fools the white men are for not be able to see the obvious.

But to me it does not necessarily show that human nature has fewer features than generally thought. All it shows is that there's quite a bit of variation in the human species. That variation might be a result of natural biodiversity in our genes. (Or, some of it might.) Take for instance all the variation among dogs in appearance, intelligence and personality; it doesn't mean there's not much to "dog nature."

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