Monday, May 30, 2016

Noah Smith Shuts His Ears and Cries “La La La”

Recently, Noah Smith made reference to “the incredible progress in poor countries in the last 30 years.” Clearly, Noah has a low bar for incredulity. Based on a variety of measures, countries generally progressed more slowly in recent decades than they had previously. (pdf) (pdf) I challenged Noah on this point, suggesting that he was unduly influenced by China‘s truly extraordinary growth. For example, average annual per-capita GDP growth in Latin America over 2000-10 was little more than half that of 1960-80– clearly better than the 1980’s, which saw growth one-tenth that of the previous two decades.
Nor did growth accelerate in the last five years— averaging 1.1 percent. Progress, to be sure, but the last 30 years saw 1.2 percent annual average growth in per-capita GDP. Smith’s reference to 30 years of incredible growth certainly does not apply there.

So it was extra provocative when Smith cited Mexico and Brazil as examples of places where “living standards have improved a lot.” Mexico grew 38 percent per-capita in the 30 years between 1985 and 2015— a whopping 1.1 percent per year. Brazil grew even more slowly at 0.8 percent per year. When called on it, Smith wrote Doubled! Now, the data here shows 85 percent growth from 1999-2013, which seemingly would have resulted in a 16-year doubling from 1999 to 2015 if the trend in this data continued.

How can we reconcile Mexico‘s slow growth 1985-2015 and much more rapid growth between 1999-2013? Does Smith believe Mexico collapsed by a quarter between 1985 and 1999? Actual growth was 6.6 percent— slow, but not that bad. The answer was pretty obvious to those of us who have looked at the data in any depth. Smith’s numbers are in current dollars. Adjusting for inflation, Mexico grew 28 percent from 2000-15. That is a far, far cry from Smith’s 100 percent.

Worse, Smith cited Mexico in support of progress over 30 years— not 15. Over the previous 15, Mexico grew all of 8 percent— a mere half of one percent per year. Brazil grew even more slowly, averaging only 0.8 percent per year from 1985-2015. Smith simply does not know what he is talking about yet insists he did not err. What is it called when one reiterates a wrong position once confronted with the facts? Derp, perhaps?

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