Views of a Nepali Economist

...based on fieldwork conducted in 640 Indonesian villages

There are two striking results...First, when citizens are asked to make collective judgments about the relative wealth of their neighbors, the outcomes are very close to those produced by objective measures. Second, citizens are far more satisfied by the results when they are consulted than when they are left out of the process.

...the researchers found no evidence of “elite capture,” the attempt by local leaders to manipulate the rankings for the benefit of their own relatives or political allies.

Actual investment equals actual saving in all three economies all the time. As it must. But the three economies are different. The output of apples takes forever to adjust to bring desired investment equal to desired saving. The output of wheat adjusts in one year. The output of haircuts adjusts instantly.

All three economies are, of course, ideal types. The real world is a mixture of all three, and a lot more complex, with different firms operating in different stages of the production process, so that goods-in-process (intermediate goods) must also be bought and sold.

But, is the real world moving slowly towards a haircut economy? Or is it moving the other way, towards an apple economy?

Labels: demand, expectations, Indonesia, inequality, monetary economics, output, poverty, recession

# posted by Mukesh Khanal @ 1:04 PM