Word: prasad
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Dates: during 2000-2009
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...whether or not they will buy remains an open, and crucial, question. Even though Chinese are becoming wealthier, they are actually saving a greater percentage of that new wealth. Cornell University economist Eswar Prasad figures that China's average urban household saving rate reached 28% of disposable income in 2008 - 11 percentage points higher than in 1995. As a result, the role consumer spending plays in China's economy continues to head in the wrong direction. Private consumption accounted for a mere 35% of GDP in 2008, down from 46% in 2000. China's ratio stands at about half that...
...suffer. "I don't see any evidence" that China's economy is rebalancing, MIT's Huang says. "Its always difficult to get consumption to grow in a limited period of time." Greater consumer spending in China could have a big impact as well on the world economy. Cornell's Prasad figures that if China can increase growth of private consumption to 20% a year (much higher than the trend of nominal GDP growth of about 15%), global GDP growth would get a meaningful 0.25% boost. (See TIME's China covers...
...example, the U.S. - could face disadvantages when trying to tap fast-growing Asian markets. This, in turn, could have a negative impact on efforts to rebalance excessive debt in the U.S. and excessive savings in Asia. FTAs "create a nonlevel playing field with advantages for Asian countries," says Eswar Prasad, professor of trade policy at Cornell University. "If the most dynamically growing part of the global economy gives the U.S. restricted access, that has an impact on the whole rebalancing movement...
...account the rise of new powers like Brazil, Russia, India and China - the "BRIC" nations. Under a complex system of voting rights, Italy has greater clout than Russia or India. "Belgium and the Netherlands have one seat each, the same as Brazil, which is totally absurd," says Cornell's Prasad...
Geithner has said he'd like to see the board reduced to 20 seats, with more say for the BRIC bloc. Although that makes economic sense, it will be very hard to achieve, warns Prasad: "It's a zero-sum game: for someone to gain a bigger role, someone else has to lose theirs...