Crossing Continents: Poland’s New Immigrants, Radio 4

Poland has been traditionally known to be a poor country with a scrambled government and an infrastructure that made other European countries appear as if they were paradise. However, there have been some revolutionary changes in Poland, in these past few years. Poland is becoming a new thriving economy, which is attracting many immigrants to this country. Furthermore, Poland is one of the few known European countries that have actually experienced economic growth during the recession, unlike many of its neighbours.

When one thinks of a financially thriving city, one imagines the diverse and wonderful streets of New York or the exotic and beautiful locations of Singapore, but never Poland, an economy which had been transitioning from Soviet control in the 70s and 80s to a democratic approach. However, that is all changing, with many investment banks deciding to place their banks in Poland, such as Credit Suisse, one of the biggest investment banks in the world.

On the other hand there is a darker side to these astounding changes and that is people’s opinions and feelings often take much longer to change than law, as was demonstrated during the Civil Rights Campaigns in USA in the 1960s. This is apparent, as some local Polish people, hold racist views to this new wave of immigrants. Therefore, Poland needs to quickly learn how to become a multi-cultural nation, rather than the mono-cultural nation it has been throughout much of its history.

However, economists and politicians say that Poland needs immigrants and would suffer without them. This is so, as during the transition period after the collapse of the USSR in 1991, Poland lost many thousands of citizens through the course of many years. They moved to countries with better economies and living standards such as the UK. So, Poland needs these immigrants to ‘replace’ those Polish people who left. This is quite ironic as many other European countries had to deal with Polish immigrants and now Poland has to deal with this new wave of immigrants.

To conclude, Poland now has one of the most significant economies in Europe and this has caused a substantial increase in the amount of immigrants who wish to live in Poland and become official Polish citizens. It is now up to Poland to ensure that they adapt quickly to this new atmosphere that has been created, to continue to thrive and succeed economically and eventually as a whole country. 

Demystifying the Chinese Economy by Professor Justin Lin, LSE

This lecture was very informative and analytical of the economic success China has experienced and will continue to do so. China, as most people are now aware, has become the largest exporter in the world and could soon have a larger economy than the USA, who has had the ‘title’ for more than 50 years. Justin Lin produced an extensive argument outlining the possible reasons for China’s success and the roots of dynamic economic growth.

Firstly, Lin highlighted the significant achievements China has made in their rise to success. They have brought millions of people out of poverty and increased their living standard substantially. However, the most surprising of all was the fact that the national income for China was a third of that of Africa in 1979, yet we know it is now apparent that China has one of the greatest economies in the world.

The extent of China’s growth is extraordinary, for example they have experienced a 9% growth rate for the past 32 years. Many people are now sceptical about the future of China’s growth and claim that soon China will stop growing or could even collapse. This was surprising for many people because many other East Asian economies had experienced similar growth but never for this time period.

Furthermore, the idea of economic growth is a fairly modern one. This was so, as prior to the 18^th century, economic growth was unheard of, yet over the course of the last two centuries, many countries around the world experience growth, which seemed to double once in a while. However, it is clearly obvious that economic growth helps to move countries from economic downturn to become prosperous nations.

Justin Lin also made mention of the fact that many people make incorrect predictions about the future of countries’ economies, as they use the wrong data or resources. Lin believes to correctly measure the potential of an economies’ growth, the following has to be considered. The gap that country has with high-income countries in terms of technology or GDP. Next using examples of history, it is clear that one can see the time it takes for a developing country to become an economic superpower, this is evidently true with Japan during the 1950’s.

To conclude, the lecture was informative and analysed the economic power and history of China. The information presented by Professor Justin Lin, answered and demystified many questions regarding the economy of China.

Modelling Public Sector Wage-Employment Behaviour: Evidence From Transitioning Economies by Dr. Jelena Lausev, LSE

This lecture seemed at first very complex and difficult to understand, however as the lecture progressed these confusing ideas became very simple and easy to understand. Dr. Lausev effectively portrayed the problem of the economies in Eastern Europe that have in the last twenty years emerged from being satellite states under the Soviet Union. The significant problem that is actually becoming more prominent is the wage inequality of men and women in these countries.

During the lecture there were many models and formulas shown that are used to calculate and predict the wage inequalities, they were very complex and had many different parts to it. However, even with these complexities, these formulas are very useful in explaining the phenomena that is: why does wage inequality continue to increase, especially in countries in Eastern Europe? Dr. Lausev described these countries as ‘transitioning’ economies. This term means that these economies are transitioning from the Communist regime, which would have most likely imposed a Centrally planned economy to a market based economy where prices are determined by market signals and they follow the theory of Adam Smith, the ‘Invisible Hand’.

The problem of wage inequality was emphasised heavily in Dr. Lausev’s lecture, however this problem seems to occur primarily in the public sector. The lecture was also accompanied with many tables and figures that demonstrate this peculiar problem.

Dr. Lausev made a comparison between the private sector and the public sector and a possible reason for why wage inequality was increasing. She mentioned Elasticity of substitution between skilled and unskilled workers. Furthermore, the elasticity of skilled workers is higher than the elasticity of unskilled workers, as it is cheaper to transfer skilled workers than unskilled workers, which explains why their elasticity is lower. In addition, public sector workers now have a private sector worker alternative that would have a lower elasticity. Finally this all links back the original problem, because the transition of these economies means a decline in the public sector monopsony power, which means a market situation in which there is only one buyer and many sellers.

In conclusion, Dr. Lausev’s talk was very interesting and at times quite complex and difficult to comprehend. However, these advanced formulae and theories were described effectively and successfully. 

Dazed and Confused:Making Sense of an Uncertain Economy by Gillian Tett, LSE

This lecture by Gillian Tett was very interesting and contained much information regarding the current economic situation  of the world and how it has changed. According to Tett before 2007, it was apparent that economists did not rely on politics, yet this has now changed and now politics is vital for economists. Furthermore the past ways of predicting the future using formulas and equations will not work as the economic world now constantly fluctuates.

Tett also revealed her theory on the phases the economic world has gone through. The first of these three main phases is the Era of Great Moderation which was ongoing until the 2008 crash. During this time, the future of a country's economy could be very predictable. Moreover, economists also understood why the word 'credit' comes from the Latin word 'credere' meaning to trust or believe, as finance without trust does not work. The next phase Tett described was the Era of Turbulence and that was from around 2008-2010 when the economic world experienced much change in a very short time. However, this phase has ended because the current economic climate is much calmer and not as turbulent, but it is not as relaxed and calm as it was during the Era of Great Moderation. The last phase which is also the current one, is the Era of the New Normal, where politics matters greatly for economists. This is due to the fact that political laws and regulations now matter so much more than previously thought. For example the Dodd-Frank Act (US) and the EMIR Regulations (Europe).

Tett also discussed the opinions of ordinary people during these troubled times. She made an excellent analogy for the typical confusion people experience when it comes to understanding economics. Tett related this to the corruption of the Catholic Church in the 1500s. The laity (general public) are given sermons by priests (bank CEOs and political leaders) in a language they don't understand (financial terms and phrases) and the Pope (head of ECB) oversees the entire sermon. This analogy is superb in demonstrating the confusion and in some cases ignorance of the common man in not understanding financial terms, which leads to them being dazed and confused, as was the title of Tett's lecture.

To conclude, Gillian Tett's lecture was very informative in highlighting the problems with the economic world and analysing these last few years, where the economic climate has been volatile and unpredictable. She also managed to demonstrate, with relevant examples, the confusion that surrounds economics and how it is time for us all to 'grow up' and understand that life can never be predictable. All in all, an excellent talk, from which much can be understood about the substantial change surrounding the world of economics.