Tyler Cowen: belief

Transcript context

…Okay, maybe we can go back to that because that also fascinates me. Per capita income growth, again, that’s an extremely good question. I think that Mexico has an overall impressive medium-term GDP growth. At the end of the ’60s, it’s the 27th-largest economy in the globe. Right now, it’s the 13th. The question becomes really income distribution. I think that if you look at it not in question of a few years or maybe a decade, but over a longer time, Mexican economic growth has been impressive. This isn’t all down to hard work or smart policy. It’s down to the great advantage of being next door to the world’s largest market. What it does mean is that you have maybe not the extremely accelerated economic growth of right now in India, but post NAFTA, you actually do get quite a lot of quite fast takeoff, speed of growth. Maybe it’s just that Mexico has actually gone a stage beyond India. India is, if you want, playing catch-up. That’s me thinking on my feet. What do you think? I think human capital is by far the biggest problem. Then the slow rate at which small informal businesses are willing to enter the more heavily regulated sector is a real bottleneck. Mexico has a lot of human capital. One of the reasons that this population control works is because you get far more people going through those critical first three years of primary school. Ideally, everyone goes through high school. But that’s just not a global reality. The key metric is how many people you’re getting through three years of school, which teach you to read, write, and do rudimentary maths. Mexico’s record on that is far better than most middle-income comparatives. There’s a really good study which says especially women, far more get those first three years than precisely actually in India, Kenya, and Egypt. We’re looking now at this phase of takeoff I’m talking about, of the ’70s and ’80s. I think the human capital is really there.…

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