30 | June | 2025 | Mostly Economics

Archive for June 30th, 2025

State of the Art: Economic Development Through the Lens of Paintings

June 30, 2025

Clément Gorin, Stephan Heblich & Yanos Zylberberg in this NBER article trace economic development through historical paintings:

This paper analyzes 630,000 paintings from 1400 onward to uncover how visual art reflects its socioeconomic context. We develop a learning algorithm to predict nine basic emotions conveyed in each painting and isolate a context effect—the emotional signal shared across artworks created in the same location and year—controlling for artist, genre, and epoch-specific influences. These emotion distributions encode subtle but meaningful information about the living standards, uncertainty, or inequality characterizing the context in which the artworks were produced. We propose this emotion-based measure, derived from historical artworks, as a novel lens to examine how societies experienced major socioeconomic transformations, including climate variability, trade dynamics, technological change, shifts in knowledge production, and political transitions.

Posted in Academic research & research papers, Central Banks / Monetary Policy, Economics - macro, micro etc, Growth and development | Leave a Comment »

Is China Really Growing at 5 Percent?

June 30, 2025

William L. Barcelona, Danilo Cascaldi-Garcia, Jasper J. Hoek, and Eva Van Leemput1 in this Fednotes:

Chinese authorities recently announced a growth target of “around 5 percent” for 2025, the same as their 2024 target. Five percent is about half the pace of growth that China sustained from the 1980s to the early 2010s, but it is nonetheless quite high for an economy flirting with deflation and mired in a years-long property bust. The ambitious growth target, given the circumstances, has led many observers of the Chinese economy to once again treat the official GDP data with skepticism. In this note, we revisit an alternative indicator of Chinese GDP growth developed by Barcelona et al. (2022) to examine whether official data overstate Chinese GDP growth.

Our findings suggest that recent GDP growth figures, which have been in line with the stated target, appear to align closely with broader Chinese economic indicators and do not appear to be overstated.

We find that the recent near-target growth has been driven by a strong supply-side performance, supported by sustained global demand for Chinese goods and industrial policies promoting self-reliance. This has helped offset weak domestic consumption, which never fully recovered from COVID-era lockdowns and continues to be constrained by the ongoing property slump.