The New Normal For Emerging Economies


The Princeton economist Dani Rodrik believes that sustained, meteoric growth in emerging economies may no longer be possible. The great “age of industrialisation” may be behind us.And evidence for this view is coming from at least four directions:
First, machines can perform more and more functions in manufacturing and sometimes even in services. That makes it harder to compete via low wages. Say you run a company in a developed nation and have been automating many of its processes. Because your total bill for employee wages would be low, why not choose the proximity and familiarity of investing in labour in or near your home country? This change would help the jobs picture in the United States and probably countries like Mexico, but it could hurt many other lower-wage nations.  Read more of this post

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