we're on values?
*&^$# lah.. to the asswipes up high, the only thing they know
about values is the dollar sign..
let me illustrate:
BT 15 Jun 2007, p20
Of babies and
currencies
THERE has been, to be sure, much hand-wringing about falling birth
rates and, at the same time, growing numbers of older people, and
their effects on the economy and society, not just in Singapore but
across much of the developed world. But establishing a numerical
link between fertility and the exchange rate still manages to score
for novelty in the heady, rarefied world of academic
explorations.
Economists could, in the same vein, conceivably test statistical
relationships between, say, the number of divorces in a country and
its interest rates; or between average heights of male adults and
the national savings rate. There's probably some study out there
linking the amount of annual rainfall to the country's investment
level. Clearly, such academic adventures are limited only by the
researchers' imagination.
In any case, as the authors of the paper Fertility & The Real
Exchange Rate see it, the link between the two 'seems intuitive'
enough. Child-rearing means greater spending and reduced savings,
and children in themselves are consumers rather than producers, so
having fewer babies means higher national savings.
If savings rise and investment also falls - due to a smaller
population - the current account improves, and the exchange rate
typically weakens in response.
This much seems straightforward - and the links between fertility
and savings, investment and the exchange rate, have been well
explored in economic literature, the authors (a Berkeley professor
and a MAS economist) note. What's different about their paper is -
their findings, based on data from 87 countries between 1975 and
2005 - stem from empirical evidence, rather than theory.
And, even after taking into account the usual reasons why exchange
rates move - such as the effects of government policy, trade
reforms - they still find that a one-point decline in the fertility
rate spells a 0.15 per cent fall in the real exchange rate. The
result is plausible and also robust, the authors assert. Clearly,
the study is meant to add to the understanding and debate about the
profound social and economic impact of what appears to be
inevitable, and perhaps irreversible, demographic change in many
economies.
The greying of populations cannot quite be undone, and sensibly,
many countries have come around to embrace and harness the
potential of the Silver Dollar.
Meanwhile, governments are trying their darndest to coax the stork,
from generous fiscal incentives to pro-family policies, and
educated women everywhere are aware enough of the macroeconomic
effects of their decisions to have, or not have, a baby. But talk
of a weak currency is unlikely to move even the most patriotic to
procreate.
Not that the authors of the fertility paper have any such aims. Any
interest in the paper lies solely in its estimates. It's a 'good
place to pass the torch to others', they said. Perhaps they might
stir interest beyond fellow economists.
---------------
they equate babies with the bloody economy... and all that.. even
to currency rates...
the economy doesn't serve humanity anymore.. humans are just
statistics to pad further numbers to be sacrificed to the false god
called "economy"
we make our choices.. ultimately we have to..
