Economic Rockstar

Connecting Brilliant Minds in Economics and Finance

077: The Irish Economy 100 years on from the 1916 Easter Rising

by

Play in New WindowDownload

077: The Irish Economy 100 years on from the 1916 Easter Rising

This is a commemorative episode celebrating the 100 year anniversary of Ireland’s 1916 Easter Rising in which the Proclamation of the Republic was read by Padraig Pearse at four minutes past noon on Easter Monday, April 24th, from the steps of the General Post Office on Sackville Street (now known as O’Connell Street). The document proclaimed Ireland’s independence from Great Britain.

How was Ireland’s economy performing in 1916 and how far have we come 100 years on?

The Irish Economy 100 years on from the 1916 Easter Rising

Background:

Ireland in 1916, consisting of 32 counties, was ruled by Great Britain. The 32 county economy experienced a period of unprecedented prosperity mainly due to the positive economic effects of the First World War.

However, since the Great Irish Famine of 1846, Ireland experienced mass emigration and large numbers of deaths. The laissez-faire economic ideology was a failure. From the period 1851 to 1916, over 5 million Irish citizens emigrated reducing the population from a peak of approximately 8 million to 3 million.

The Irish economy was ruled by Great Britain and its economy became increasingly tied to trends in global markets. The cost of living increased and there were some rises in living standards. These were subject to sharp declines due to the recessions of 1859 to 1863 and 1877 to 1880. Poverty was widespread and tensions between landlords and tenant farmers escalated. Despite this poverty, Irish living standards were above most of Eastern and Central Europe but income levels remained below the UK and the US.

Ireland’s economy became increasingly reliant on four main industries: Agriculture, Linen production, Shipbuilding (where the Titanic was built) and Brewing and Distilling. However, agricultural exports were heavily dependent on Great Britain and Shipbuilding was dependent on an outdated industry. For example, it wasn’t long after the First World War that the Irish Shipbuilding industry collapsed.

The First World War of 1914 brought about a period of prosperity for Ireland, due to the increased demand for food, linen and ships that were directly linked to the war effort. However, this prosperity was not shared by all.

So what did the Irish economy of 1916 look like compared to its economy today 100 years on?

CSO 1916 - 2016 infographic

Source: Central Statistics Office

Population:

The population of Ireland in 1916 was one of the lowest recorded in its history. According to the population census of 1911, the population stood at just 3.14 million. It represented a country devastated by death caused by the famine over a half century previous and the subsequent mass emigration that ensued.

Today, Ireland’s population has recovered to 4.59 million, an increase of 46%. However, many have emigrated due to the financial crisis of 2007, most notably Ireland’s youth. We have reverted to being a net emigration population after a period of becoming a net immigration population, attracting workers from overseas as well as bringing Irish people home.

Emigration for the whole island of Ireland in 1916 was 7,366 or 17 per 10,000 of the population. This had fallen from a substantial level before the outbreak of the Great War. The latest data for 2015 shows emigration for the Republic of Ireland at 80,900 representing 175 per 10,000 of the population.

Emigration in 1916 consisted of 5,580 females and only 1,786 males. This I found surprising.

The four main destinations for Irish emigrants in 1916 were the US, the UK, Canada and then Australia.

In 2015, the UK was the main destination for Irish emigrants. Only 7% of emigrants went to the US in 2015 compared to 58% emigrating in 1916.

The Irish diaspora abroad is quite large. Despite being a small island off Western Europe, Irish smiles have been welcomed all over the world. Ancestry can be traced back to Ireland particularly for those living in the United States, the UK, Argentina, Australia and Canada.

Today, it is estimated that there are 80 million people of Irish descent living around the world today. Other that the Republic of Ireland and Northern Ireland, Montserrat in the Caribbean is the only other country where St. Patrick’s Day is a public holiday.

Montserrat is known as the Emerald Isle of the Caribbean and it’s Irish heritage dates back to the 17th century when the island became a safe haven for the Irish who were originally sent to the Caribbean as slaves by Great Britain’s leader Oliver Cromwell. A census in 1678 showed that more than half of the population on the island were Irish.

Life Expectancy:

According to records for 1911, the life expectancy for a male born in Ireland was 53.6 years and for a female 54.1 years. Today, a male born in Ireland has a life expectancy of 78.3 years and a female 82.7 years.

Despite the period of prosperity, Ireland remained divided in terms of the gap between wealth and poor. Much of rural Ireland in the west of the country lived as an agrarian society, dependent on agriculture for a living. Living standards were much lower relative to other parts of the country.

Urban areas did not escape the ravishes of poverty. Inequality was more prevalent in urban towns, particularly in Dublin city. Despite a boom in food and linen exports in 1916, the Irish poor remained hungry.

Henrietta Place, Dublin 1913. The flight of wealth to the suburbs often meant an escape from inner city squalor.

Henrietta Place, Dublin 1913. The flight of wealth to the suburbs often meant an escape from inner city squalor.

Poverty levels in Ireland today are at 8% with households consisting of one adult and one or more dependent children considered most at risk. Rural Ireland, including the West of Ireland, has a higher incidence of poverty than the rest of the country. As the saying goes, things change but always stay the same!

Many adults and children perished due to influenza, bronchitis and tuberculosis. These were the leading causes of death in Ireland along with heart disease. Today, heart disease is the leading cause of death in Ireland with few incidences of death from the other forms. The number of deaths by suicide that was officially recorded in 1916 were 68 compared to 459 for 2014, This represented 10 per 100,000 of the population compared to approximately 2 per 100,000 of the population.

Housing:

Ireland’s macro economy of 2016 is showing remarkable progress since it’s recession, bailout and financial crisis. The Irish have a love affair with housing. Perhaps it has its roots in history where many people were evicted from their homes during the Great Irish Famine.

During the boom from 1998 to 2007, Irish house prices soared only to come crashing down once the crisis hit. At its peak, over 90,000 houses were built but today only 11,000 houses were completed. The Irish housing market is under immense stress with demand outstripping supply. This shortage is resulting in much higher rents than what was recorded during the boom period. House prices are recovering but recent government legislation is making it difficult for landlords who are selling their property or evicting their tenants in order to capture the higher rental yields. Ireland is undergoing a housing crisis in today.

In 1916, Ireland experienced a severe housing crisis. Dublin and other cities became infamous for the living conditions of its citizens. The tenements, where many impoverished families lived, marked a bleak period in recent Irish history.

Multiple families shared large terraced houses with extremely poor sanitary and hygiene conditions. It was estimated at the time that 20,000 families in Dublin occupied single rooms and in some cases with other families. Family sizes of 8 or 10 children were not unusual. There were cases of 104 people occupying a single house built to accommodate one family.

A Tenement Room on Francis Street, Dublin in 1913

A Tenement Room on Francis Street, Dublin in 1913

Many evictions took place as families fell behind in rent. Facing starvation, children queued for bread which was handed out by religious orders. Many people in the West of Ireland emigrated due to food shortages and abandoned their homes. Despite many empty homes in the rural parts of Ireland, many families suffered homelessness, extremely poor living conditions and starvation.

Due to the housing crisis that Ireland is experiencing today in 2016, there are some echoes of the past. Homelessness has jumped 100% since January 2015. Over 700 families are living in emergency accommodation in hotels and guest houses. Evictions are up significantly and there are currently 17,000 people in the courts who are at risk of losing their homes. Food parcels are being handed out each week and the number queuing is rising.

Employment:

The Irish economy in 1916 was transitioning toward becoming an industrial nation. It was by no means considered backward and was in fact placed in the group of middle-ranking industrialised countries along with the Netherlands, the Scandinavian countries, Italy and Portugal.  26.8% of workers in 1911 worked in manufacturing jobs compared to 8.6% in 2011.

An estimated 150,000 men had joined the British army and many men and women went to the UK to find employment in munition factories and hospitals. Wages had increased during this time.

Almost 50% of the working population were employed in the Agriculture sector in 1911. This compares to just 4.9% in 2011.

In 1911, 8.8% of the labour force in Ireland worked in the professional group of occupations. By 2011, these workers now account for over 40% of the Irish workforce.

Ireland’s unemployment rate today is 8.8% coming from a recent high of 14.4%. It is unsure what the level was in 1916.

Exports:

Ireland in 1916 mostly consisted of indigenous industries. 85,000 workers were employed in linen production with over 18 million pounds (weight) of linen yarn and 112 million pounds (weight) of finished linen goods exported. Prior to the outbreak of World War I in 1914, about 70% of these exports were to the United States of America. However between 1914 and 1918, linen was in great demand for military purposes by the British Army for items such as tents, haversacks, hospital equipment and aeroplane fabric.

Today much of its traditional industry gone today. Very few linen manufacturers and weavers exist today. To bring my own personal family history into this story, my family remains one of a few linen weavers in Ireland today, producing the best Irish linen in the market with exports to countries that include Japan, the US and Italy. I’m personally proud of my father for what he has achieved and for extending the Irish tradition of producing the finest linen in the world.

Ireland is considered a small open economy and the UK still remains one of our largest trading partners. The Irish economy attracts many multinationals companies to locate here. In 2016, Ireland ranks among the top countries regarding industrial competitiveness and ease of doing business.

The Guinness brewery was the main brewery in Ireland and in 1916 it had the largest output of any brewery in the world, brewing more than two-thirds of all beer brewed in Ireland.

Cask Yard St. James' Gate Brewery 1906 - 1913

Cask Yard St. James’ Gate Brewery 1906 – 1913

The largest exporting sectors in Ireland during 1916 were woollens, brewing, butter, bacon, poultry, cattle, cotton goods and linen. The sectors that were in decline included horses, whiskey, pigs and sheep.

Ireland had a trade surplus of 1.5 million pounds (and a balance surplus of 11.1 million pounds) in 1916. For the latest data today, which is January 2016, Ireland is operating a trade surplus of 4.99 billion euro. Ireland’s largest exporting sectors are Medical and pharmaceutical products (representing 27% of total exports), Office machines and automatic data processing machines, and Food and live animals (representing 7.8% of our total exports).

The EU accounts for 56% of the total value of Irish goods exported. Belgium is Irelands largest export trading partner accounting for 15% of the total value of goods exported.

Great Britain remains Ireland’s single largest source of imports with 25% of the total value of goods imported to Ireland.

The USA remains Irelands largest non-EU destination for exports and imports.

GDP:

According to research by Kevin O’Rourke of the Department of Economics at University College Dublin a proxy measure for GDP per capita in Ireland was estimated to be 32.50 in 1913. This was based on a GDP estimate of 150 million. To put this into some context, the estimated GDP per capita in 1864 was 12.50 with GDP estimated at 60 million – over a 160% increase in nominal terms between the Famine and the Great War. Irish GDP per capita converged on the UK average during this time.

According to the International Geary-Khamis dollars, Ireland’s GDP per capita in 1913 was $2,736 whereas the US GDP per capita was $5,301 and the UK’s at $4,921, almost twice that of Ireland’s. This seems to suggest that incomes had yet to converge with those in Great Britain.

Eden Quay displays the bustle of turn of the century Dublin city life

Eden Quay displays the bustle of turn of the century Dublin city life

Ireland would have been considered one of the poorest Western European countries along with Greece, Italy, Portugal and Spain – yes there’s that familiar acronym of the financial crisis.

Today, Ireland is considered one of the richest countries in the world with GDP per capita of just under $49,000, placing the country in 10th position, with the US in 9th and the UK in 19th according to the World Bank.

GDP for Ireland was $11.9 million but this collapsed to $7.8 million by 1921 perhaps due to the Irish civil war. It was only in 1960 that Ireland recovered to pre-1916 levels.

There were 9,850 cars registered in Ireland in 1915 with now over 2 million registered today.

F_Horse, bicycle, Car_Stephen'sGreen_clar21t

Inflation:

Due to the outbreak of the First World War in 1914 and the resulting scarcity of goods, inflation in Ireland increased considerably by 200% over the wartime period as measured by the wholesale price index.

Unless wage inflation was outpacing price inflation in 1916, which is very unlikely, families must have experienced a real reduction in the purchasing power of their £.

These increases in prices were also due to Government policy which increased taxes and duties on various products.

The retail price of butter, tea and eggs were expensive in 1916. For example, the price of a pound of butter then would have cost 7 euro 35 cent updated to today’s consumer price index compared to today’s price of 2 euro 79 cent.

Links:

Family History Research:

  • Ireland’s Census: Search for your Irish Heritage for the following Census years: 1911, 1901, 1851, 1841, 1831 and 1821.
  • National Library of Ireland: www.nli.ie

Images:

Podcast: Play in new window | Download

058: Morten Jerven on Poor Numbers and Why Economists Get It Wrong With Africa

by

Play in New WindowDownload

058: Morten Jerven on Poor Numbers and Why Economists Get It Wrong With Africa

Morton Jerven is Professor of Economic History and Development at the School for International Studies at Simon Fraser University in Vancouver, Canada.

In 2014, Morton was appointed Associate Professor in Global Change and International Relations at Noragrica at the Norwegian University of Life Sciences.

Morton has published widely on African economic development, and particularly on patterns of economic growth and on economic development statistics.

Upon the release of his book, Poor Numbers: How We Are Misled by African Development Statistics and What to Do about It, Morton caused uproar across Africa and had been expelled from two conferences. His latest book Africa: Why Economists Get It Wrong is now available on Amazon.

Morton is an economic historian, with an MSc and PhD from the London School of Economics.

Economics:

In this interview, Morten mentions: capital markets, sovereign bonds, National Income Statistics, GDP, demographics, wages, rents, profits, consumption, investment, exports, imports, population growth, m-pesa, debt-to-GDP ratio, poverty and GDP per capita.

Economists:

In this interview, Morten mentions: Jonathan Temple, Stephen Durlauf, Simon Johnson, Shanta Deverajan, Neil Fantom (World Bank) and Wolfgang Stolper.

In this episode you will learn:

  • why Morten was expelled from two conferences in Africa.
  • about the knowledge problem that exists in economic statistical data.
  • if economic statistics is underfunded relative to other social sciences.
  • whether economic data from African countries is intentionally misleading or if it’s a methodology and availability problem.
  • what is GDP and why is it used.
  • the problems with measuring GDP.
  • why the production approach is really the only valid method to measuring GDP.
  • why a country’s GDP is estimate by proxy and how productivity data is difficult to collect.
  • how population growth is used as a proxy for GDP.
  • whether we should allow Google and other companies that store big data to provide economic data.
  • whether cooperation or conflict between big data and official statistics will emerge.
  • how observing the brightness of countries from space is now being used to measure economic growth.
  • what the IMF does to missing data, such as GDP.
  • why Morten collected his own data for a number of African countries since the IMF wouldn’t share their own.
  • whether papers written by the IMF and the World Bank undergo a peer-review process.
  • how the ‘branding’ of statistics by the World Bank and the IMF can mislead the user.
  • how using the 3 methods of calculating GDP for all African countries shows significant differences when ranking each from poorest to wealthiest.

Quotes by Morten Jerven:

Statistics is the archetypal way of generalising from complex social realities to a very orderly aggregate picture – Morten Jerven

Make everything count. If you write something, make sure it’s going somewhere. If you prepare a lecture to speak about something, make sure you have an idea about how that can become a publishable unit – Morten Jerven

Make sure, as an academic working, it’s important not to think that working long hours is the key to being effective. Start writing early. It’s important – Morten Jerven

Organisations Mentioned in this Episode:

Books:

Papers/Articles:

Resources:

Podcast: Play in new window | Download

046: Shanta Devarajan on The World Bank, Quiet Corruption, Government Failure and Comparative Advantage in the MENA Region

by

Play in New WindowDownload

046: Shanta Devarajan on The World Bank, Quiet Corruption, Government Failure and Comparative Advantage

Shantayanan Devarajan is the former Chief Economist of the World Banshanta devarajank’s Middle East and North Africa Region. Since joining the World Bank in 1991, he has been a Principal Economist and Research Manager for Public Economics in the Development Research Group, and the Chief Economist of the Human Development Network, South Asia, and Africa Region.

Shanta was the director of the World Development Report 2004, ‘Making Services Work for Poor People’. Before 1991, he was on the faculty of Harvard University’s John F. Kennedy School of Government.

Shanta is the author and co-author of over 100 publications, with his research covering public economics, trade policy, natural resources and the environment, and general equilibrium modeling of developing countries.

Born in Sri Lanka, Shanta received his B.A. in Mathematics from Princeton University and his Ph.D. in Economics from University of California, Berkeley.

People care so much about education. They will not eat if they can send their kid to a better school – Shanta Devarajan

In this episode, you will learn:

  • why Shanta decided to take a sabbatical from lecturing and never went back.
  • about Shanta’s passion to end world poverty.
  • how experiencing living on a $1 a day with a poor family made Shanta realize that the failure lies with government.
  • how empowering people in poverty-stricken countries with information could be the catalyst to end poverty.
  • the huge government failures and market distortions threatening the economy in India.
  • why teachers and doctors in India are absent from work 25% and 40% of the time respectively and how this is affecting progress.
  • how the powerful medical union in India are making healthcare inaccessible to the poor.
  • why poor people in India think that the reason why doctors do not show up at clinics is because ‘the rain didn’t come’.
  • why politicians in India do not have an incentive to fix the problem of doctor absenteeism.
  • what the solutions to corruption in India.
  • about unemployment being the biggest problem in the Middle East and North Africa.
  • that the reason why unemployment is so high in the MENA region is due the industrial sector being highly monopolised.
  • about how crony capitalism is preventing SMEs from growing in the MENA region.
  • why Tunisia has failed to develop into an export-oriented economy due the legacy of the Ben Ali family and their connections to firms operating in heavily protected markets.
  • that the failure for governments to continue with social contracts due to high deficits triggered the Arab Spring.
  • about Colonel Gaddafi’s regime and how he managed to keep peace between tribes.
  • how water subsidies and water-intensive crops are depleting water resources in Yemen.
  • why the addictive habit of chewing qat or khat in Yemen is causing water shortages.
  • why Yemen, who doesn’t have a comparative advantage in qat, continues to use resources to produce the commodity.
  • what is the main purpose of the World Bank and how different is it to the IMF.
  • where the World Bank gets its finance from and how much interest they charge.
  • how the money trickles down to the unbanked people in low and middle-income countries.
  • about biometric identification smart cards and how the unbanked in low-income countries can access capital.

Takeaway:

The problems of poor people are man-made and we as economists can actually help solve them. The way in which we can solve them is by carrying our work toward empowering them. The reason they’re man-made is that poor people lack political power. We can actually strengthen their clout, their political power, by providing economic analysis and making it accessible to them – Shanta Devarajan

Economics:

In this interview, Shanta mentions and discusses: poverty, development, capital markets, government failure, policy distortion, structural adjustment, debt crisis, macroeconomic environment, incentives, quiet corruption, unemployment, monopoly, social contracts, crowding out, finance capital, subsidies, water subsidies, energy subsidies, comparative advantage, imports, exports, budget expenditures, IMF, the World Bank, MENA, public goods, leakages, multiple effect, dynamic stochastic general equilibrium model, savings, investments, sovereign wealth funds and consumption.

Economists:

In this interview, Shanta mentions and discusses: Chris Blattman, Gerard Debreu , Joseph Stiglitz, Sherman Robinson and Paul Collier 

Influencers:

Gerard Debreu , Joseph Stiglitz, Sherman Robinson , Paul Collier 

Quotes by Shanta Devarajan in Episode 046 of the Economic Rockstar Podcast:

The marginal product of writing an additional paper was lower than my actually trying to go out there and apply what I know to reduce poverty. I became quite passionate about this quest to reduce this poverty. – Shanta Devarajan

The problems of poverty under development are problems of government failure. The problem of government failure is because the political system is one where poor people don’t have sufficient voice and sufficient ability to make sure that politicians take decisions in their interest. – Shanta Devarajan

“The World Banks’ mission is a world free of poverty” – Shanta Devarajan

Click To Tweet

On the changing views of The World Bank:

The traditional view of development in the 1950s and 60s was a belief that it was a market failure. Their capital markets weren’t working. Poor countries didn’t have access to capital and so the World Bank had to provide capital. However, in the 1970s and 80s there was a realisation that the problem was not the result of a lack of capital. There  were policy distortions in these countries that made this capital unproductive. The challenge became trying to remove these policy distortions or try to improve these policies so that capital could be productive. – Shanta Devarajan

On Quite Corruption in India:

Quite corruption in India is a deep political problem. There is nothing illegal about this corruption. It is a failure of the system. The political system is geared so that it creates this kind of corruption. – Shanta Devarajan

On Crony Capitalism in Tunisia:

It’s a little bit of a puzzle why Tunisia, which has a very highly educated population, a very nice location right across from Europe and a pretty good infrastructure, hasn’t been able to be a manufacturing, export-driven power-house. The reason is the industrial structure is being monopolised by the cronies of the political elite. – Shanta Devarajan

On Tunisia: “We must protect this economy from elite capture” – Shanta Devarajan

Click To Tweet

On Capital Leakages in Chad:

The leakages are higher in resource-rich countries. For instance in Chad, the money that was intended for public primary clinics, that actually arrives at the clinic is 1%. So the leakage is 99%. Chad is an oil-rich country. The reason for that is there is very little accountability – Shanta Devarajan

Reasons Why Yemen is Producing Khat (Qat) Inefficiently

Yemen produces its own qat despite not having a comparative advantage in the commodity. Factors of production, such as land, labor and capital, are used inefficiently to produce khat. So, the question remains as to why Yemen does not import qat. There are two main reasons why the continue to produce it domestically.

The first is that qat is consumed fresh. Domestic production allows qat to be distributed and sold throughout Yemen once it is picked. Freshness is required and it is expected that any imported khat could reduce its quality.

The second reason is that the president’s wife manages the qat monopoly and made a lot of money from it. Any imports would be competition. Given that khat is an addictive substance, the revenue made by this monopoly would have been so large that using resources inefficiently, particularly water, outweighed the costs.

The Difference Between the World Bank and the IMF

  • The World Bank only works on developing countries and the IMF works on all countries.
  • The IMF is concerned with short-term macroeconomic development, whereas the World Bank is concerned about long-term development.
  • Anything that is in the order of one to two years is when the IMF will become involved in order to solve a macroeconomic crisis.  Whereas, if it’s a question of building a road or a bridge or educating children, that’s when the World Bank comes in. Both  the IMF and the World Bank, because they’re across the street from each other in Washington DC, communicate quite intensively.
  • In the past, it may have been viewed that the IMF, because it is more macro-focused, was more interested in the aggregate budget rather than the composition of the budget. In the late 1990s, there were many countries that had fiscal crises. The IMF insisted that they cut their budget in order to maintain fiscal balance. However, just cutting the budget rather than cutting wasteful expenditures and protecting some valuable expenditures makes a big difference.
  • It got to the stage where the World Bank would come in and look at the composition of the budget and suggest where it’s better to cut rather than simply take the targets that the IMF had set.
  • Both institutions have evolved quite a bit since the 1990s. The IMF now looks quite closely at the composition of budget expenditures and the World Bank worries a lot about macroeconomic stability.

How The World Bank Funds its Operations

  • The finance that the World Bank accumulates is obtained by World Bank bonds.
  • The World Bank uses the ‘paid-in capital’ which the original members of the World Bank pledged back in 1947. This has now grown to about $300 billion.
  • This capital is used as collateral to float bonds and because of this capital, the World Bank can get bonds at three-quarters of a percent below the market rate.
  • This capital is then lent to middle-income countries at about half to a quarter of a precent below the market rate. The difference between these rates is what pays the salaries of those working for the World Bank.
  • For low-income countries, mostly in Sub-Saharan Africa, there is a separate window called the International Development Association (IDA) where concessional loans are offered. These loans are pledged every three years by donor countries. The World Bank collects this IDA money, which is about $50 billion, and lends it to these low-income countries at virtually zero percent interest with a 35 year grace period.

Recommended Resource:

The World Bank Database

Recommended Book:

Where to Find Shanta Devarajan:

Meeting Up With Shanta in Waterford City, Ireland (August, 2015):

Since our conversation in episode 046 of the Economic Rockstar podcast, myself and Shanta met up for a brief period in Waterford City, Ireland. Shanta was on a visit form Washington DC (not work-related, just in case you think the The World Bank are coming in to Ireland!). Check back for a new blog post on what we chatted about.

 

Frank and Shanta

Podcast: Play in new window | Download

042: Parviz Parvizi on Clammr, Coffee, Coase and the Economy of Iran

by

Play in New WindowDownload

042: Parviz Parvizi on Clammr, Coffee, Coase and the Economy of Iran

Parviz Parvizi is co-founder of Clammr, a mobile app and platform making audio more social and viral. Users areParviz Parvizi on the Economic Rockstar podcast calling Clammr, which features snack-sized audio clips of 18 seconds or less, the “Instagram of Audio” and “Audio Twitter”.

Previously, Parviz worked at McKinsey & Company, Goldman Sachs, the Federal Communications Commission, and O’Melveny & Myers.

He has advised top 5 global media companies and mobile carriers on strategy and growth. He was a founder of McKinsey’s iConsumer research initiative on digital consumer behavior, authoring 3 of the firm’s 10 most-downloaded media sector knowledge documents.

Parviz was a Olin Law & Economics Fellow at Yale Law School. At Cornell he majored in economics and served as President of the Cornell Economics Society while an undergraduate.

Parviz holds a JD from Yale Law School and AB from Cornell.

Economics:

In this interview, Parviz mentions and discusses: development economics, poverty, transitional economies, microeconomics, exports, auction markets, transaction costs, fair trade, taxes, theory of specialisation, Coase theorem, theory of the firm, property rights, bargaining power, market prices, transaction costs, fair trade, economic growth, consumption, productivity, autarky,

Economists

In this interview, Parviz mentions and discusses: Friedrich Hayek, Adam Smith,David Ricardo, Ronald Coase and Steven Dubnar, 

Favorite Economists:

  • Adam Smith and Ronald Coase

Clammr as featured on Economic Rockstar

Find Out:

  • about Clammr, the amazingly new app that shares an 18-second audio clip just like an audio tweet.
  • about Parviz Parvizi’s journey from Iran to the US.
  • how Parviz Parvizi got his name.
  • how there are 4 hours of audio-only time each day for people and how Clammr can accommodate your needs.
  • about the motivation behind the creation of Clammr and how Parviz and his co-founder solved a problem.
  • how Clammr was built up from the beginning at zero cost.
  • what Clammr found out about podcasting.
  • the difficulties of growing and monetising a podcast and how Clammr is helping podcasters to solve these challenges.
  • about the social aspect of Clammr and how you can share audio snippets to your friends, colleagues and audience.
  • if Clammr will adopt a monetization model similar to YouTube.
  • how Clammr’s ‘Hear More’ button can potentially lead to a paid transaction for users.
  • about the opportunities that exist for users of Clammr in the education sector.
  • how teachers can use Clammr in assessments and how students can collaborate to give their audio response in a mashup-like answer.
  • how Clammr could be the new route for a musician to become known, just like the way Justin Bieber made it using YouTube.
  • how being an early adopter of a new platform can lead to a large following.
  • about the sensation that is PewDiePie on YouTube and his degree in Industrial Economics.
  • about Parviz’s work in the Tanzania and Ethiopia coffee trade market.
  • about the challenges faced by African coffee growers and how Parviz solved this problem.
  • Parviz’s views on the recent US-Iran deal.
  • how the US-Iran deal may have economic limitations due to Iran’s economy being 70% state-dominated.
  • about the benefits of an export-oriented market economy.
  • about the benefits of a knowledge economy.
  • how democracy and economic growth could improve if marginalised groups in society are helped.

Quotes by Parviz in Episode 042 of the Economic Rockstar Podcast:

  • You build a more sustainable business if the way you get paid is a way in which all parties involved actually get value – Parviz Parvizi

Advice:

  • Don’t sell yourself short in terms of where you’re aiming and don’t think that your starting point has to define your ending point – Parviz Parvizi

  • Even if you’re aren’t getting access to the very best schools, it doesn’t actually take that much time to catch up with hard work – Parviz Parvizi

  • Aim high and exposing yourself to people, institutions and places of incredibly high standards is a great way to push yourself even if initially you’re kind of a failure”– Parviz Parvizi

Recommended Books:

The Next Decade of Podcasting:

Where to Find Parviz Parvizi:

Links for the Clammr App:

  • Download Clammr for iPhone/iPad in the App Store or by visiting Clammr.
  • For Android use the web-based publisher to upload files and for a basic listening experience.
  • Workshop and update videos.

Podcast: Play in new window | Download

040: Rebecca Harding on Trade Finance and How Delta Economics Can Help Identify Growth Opportunities World-wide

by

Play in New WindowDownload

040: Rebecca Harding on Trade Finance and How Delta Economics Can Help Identify Growth Opportunities World-wide

Dr Rebecca Harding is CEO of Delta Economics, which specialises in the area of Trade Finance. Rebecca is an independent economistRebecca Harding with an extensive background in modelling economic growth, trade, productivity, innovation and enterprise.

Rebecca is the author of nine books and has written over 250 articles on economic issues. She has held senior positions in leading academic, think-tank and corporate organisations, including roles at the London Business School, Deloitte and the Work Foundation.

Rebecca has advised the European Union and regional governments and agencies in the UK and Germany on innovation and enterprise policy.

Rebecca is a Board Member of the Society of Business Economists and a Board Member and Trustee of the German British Forum. In 2013, she was elected as a national representative of the European Movement UK.

Rebecca holds a BA in Economics and German and an MSc and PhD in the economics of Science and Innovation from the University of Sussex and writes on her blog rebeccanomics.com.

How Rebecca First Discovered Economics:

Rebecca was taught economics as a kid by her father who was a sociologist. “An economist who’s taught by a sociologist is quite an unusual thing. He started off with the fundamental principle that economics is wrong because people aren’t rational. So the first lesson in economics I had was my father telling me that the subject was wrong”.

I have a very eclectic background. I was taught by a sociologist. Some of my big influences when I was in university were in geopolitics and international relations. I’ve done a lot of political science and a lot of philosophy as well. And then, of course, I have an economics, mathematics and language background. So I’m a bit weird. I call myself a hybrid.

Find Out:

  • about Dr Harding’s company DeltaEconomics.
  • about the data used by DeltaEconomics and why it has developed its database of statistics.
  • what is Trade Finance and how it has experienced phenomenal growth in recent years.
  • how companies bridge the finance gap between the time they export goods to the time they receive payment.
  • what the challenges are with long-term growth in trade.
  • if there are inherent risks associated with the trade finance market as more sophisticated derivative and credit markets emerge.
  • about the inherent risks that may appear in the derivatives markets for trade finance.
  • if a market collapse could be the outcome of a non-compliant and unregulated trade finance securities market.
  • if could an implosion in trade finance is possible with large defaults in payments due mainly to the development of a derivatives and securities market.
  • if sovereign risk will become prominent if trade finance risk increases.
  • if enough data exists for trade finance to allow it to mature into a fully functioning wholesale and derivatives market.
  • about some risks to the global supply chain.
  • about the pioneers of innovation and productivity in economic theory.
  • how productivity and trade finance could be correlated.

Economics:

In this interview, Rebecca mentions and discusses: trade finance, credit, exports, growth, derivatives, securitisation, risk aversion, sovereign risk, business risk, contagion, commodities, inflation, fiscal policy, monetary policy, foreign direct investment, demographics, innovation and total factor productivity.

Economists:

In this interview, Rebecca mentions and discusses: Joseph Schumpeter, Christopher Freeman, Carlota Perez, J. K. Galbraith and Frances Coppola.

Influencers:

Karl Marx, Christopher Freeman, Carlota Perez, Joseph Schumpeter, J. K. Galbraith,

On Delta Economics:

“For trade data, it’s the best platform in the world – it’s corrected, it’s clean, it’s comprehensive and it covers continents like Africa all on one platform. It gives clients information on what the trading opportunities are” – Rebecca Harding, CEO of Delta Economics.

“We view the world from a trade perspective. Trade is important because it’s how businesses interact with one another.”

Delta Economics – It’s macroeconomic big data! – Rebecca Harding

Click To Tweet

What we’ve done is pioneer the way in which big data is used in economics – Rebecca Harding

Click To Tweet

What is Trade Finance?

Trade Finance is everything that drives trade itself. From a financial perspective, if you look at the value of world trade, about 80% of that is financed by banks or backed up by big insurance companies or finance through export credit agencies. It’s a huge market and grew very quickly in the from 2000 to 2007. The reason being was due to emerging markets entering into global trade in a very much aggressive way. Banks saw huge opportunities for financing trade.

Essentially, if you are trading with another company in another country, then what you need is some kind of bridging finance between the gap from when you put your goods onto a ship or an aeroplane and when it’s received by the person in the other country and paid for. So what this company needs is some kind of financing gap between those two points. That’s what trade finance is.

By including trade finance data into forecasting, you get much more accurate forecasts as to what’s going to happen to trade. In 2007, there was a tightening of credit available to businesses since the credit in the financial markets of developed countries had locked up. Subsequently, much of the trade finance went to emerging Asia and emerging Latin America and financed huge growth there.

The whole Trade Finance market is largely driven through very large finance houses such as JP Morgan, HSBC, Barclays, Bank of America, Merrill Lynch and BNP Paribas. These very big global banks are the ones that are involved on a day-to-day basis with the trade-receivables, the credit lines, the letters of credit, the open account and the working capital.

What’s also interesting about Trade Finance is that you also have quasi-government agencies and export credit agencies, which are part of the private sector and which are sometimes supported by the public sector. There is also a massive insurance market and legal sector attached to it. With such growth in the Trade Finance market, there is interest now coming from private sector private equity companies who see an opportunity to buy the debt and securitise it and actually use it as an asset class. What Delta Economics also do is it allows the data user to understand trade finance as an asset class. Companies can securitise the debt and trade that securitisation. The derivatives market will be an important component of this.

The Trade Finance market is estimated to be worth $7.4 trillion annually. There are many companies , like Lloyds, who will be putting security behind the money they are backing up.

It was seen as a way of fuelling long-term economic growth through trade.

Data Sources Mentioned in this Episode:

Recommended Books:

Where to Find Rebecca Harding:

Podcast: Play in new window | Download