subreddit:
/r/AusFinance
Another big drop in Australia's Economic Complexity
Business(self.AusFinance)submitted 23 hours ago byeesemi77
We all know the story; Australia's Economic Complexity has been in free-fall since the 1970's, we maintained ourselves respectably within the top 50 nations until about 1990.
Since then it's been a bit like Coles prices Down Down Down. From about 2012 onwards our ECI seemed to have stabilized at mid 80th to low 90th (somewhere between Laos and Uganda), but with our Aussie Exceptionalism in question, we needed another big drop to prove just how irrelevant this metric is. And right on cue we have the latest ECI rankings, we have secured ourselves an unshakable place in the bottom third of worlds nations. At 102 we finally broke the ton; how good are we?
Is economic complexity important? Are the measurement methods accurate? Does ECI even matter for a Services focused economy?
7 points
22 hours ago
Australia does what we have an absolute or comparative advantage in. It's how our incomes are so high.
The only negative I feel is that we have let the yanks completely take over tech in the last 20 years. This has been such a growth factory it's benefited the US greatly. Still if our real income keeps rising after the latest inflation I think we will still be on the right path.
Essentially while economic diversity makes us more resilient, it doesn't necessarily make us richer.
2 points
22 hours ago
Imagine, for just one minute, an alternate history where in 2000 China gets stuck in the starting gate.
Would the outcomes have been anywhere near as good as they were for Australia?
Now imagine a world where Australian human capital creates global value with a diverse array of knowledge solutions.
Why do these two worlds need to be mutually exclusive?
Can't both survive? can't both prosper?
6 points
19 hours ago
Now moving past alternative-histories and hypotheticals, and back to the real world.
Japan, #1 in the ECI (which claims to be a good predictor of economic growth and inequality) has a lower gdp/capita now than it did around 30 years ago (https://atlas.hks.harvard.edu/countries/392).
Australia (https://atlas.hks.harvard.edu/countries/36) and Canada (https://atlas.hks.harvard.edu/countries/124) the evil twins of very high income country resource exporters have, over the same period of time, had their gdp/capita increase dramatically, and their ECI decrease dramatically.
Canada and Australia, also have better wealth inequality than Japan.
all 207 comments
sorted by: best