Morning Must-Read: Barry Eichengreen: The ECB Tries Again
Noted for Your Lunchtime Procrastination for July 26, 2014

Morning Must-Read: Ricardo Hausmann: The Real Raw Material of Wealth

Ricardo Hausmann: The Real Raw Material of Wealth: "Poor countries export... materials such as cocoa, iron ore, and raw diamonds...

...Rich countries export--often to those same poor countries... chocolate, cars, and jewels.... Some ideas are worse than wrong: they are castrating, because they interpret the world in a way that emphasizes secondary issues--say, the availability of raw materials--and blinds societies to the more promising opportunities that may lie elsewhere.... Consider Finland.... A classical economist would argue that, given this, the country should export wood... a traditional development economist would argue that it should... add value by transforming the wood into paper or furniture.... But wood opened up a different and much richer path to development. As the Finns were chopping wood, their axes and saws would become dull and break down, and they would have to be repaired or replaced. This eventually led them to become good at producing machines that chop and cut wood.... From here, they went into other automated machines...

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