Welcome to the Growth Blog

The Growth Blog is a forum for you - the policy maker, the academic, the student, and the interested citizen of the world - to agree, disagree, or simply to engage current practitioners on policies and issues critical to development. This platform was inspired by the series of meetings that the Commission on Growth and Development held around the world over the course of the last two years. Of the many lessons that emerged in the deliberations, the one that stands out is that inclusive growth requires inclusive thinking, and inclusive discussion.

 

Month of October, 2008

Global Turbulences and Slowdown in G7 Growth - IMF-WB Program of Seminars

Submitted by Administrator on Fri, 10/31/2008 - 15:35.

On October 10, 2008, Michael Spence, Mohamed El-Erian and Mahmoud Mohieldin discussed the current global imbalances, macro economic global governance, and the impact it will have on the developing world.  Please access the video of the discussion here.

Michael Spence Offers Recommendations on How to Avoid an Asset Deflation Overshoot

Submitted by Administrator on Tue, 10/28/2008 - 14:24.

In an opinion piece featured in the Financial Times' The Economists' Forum on October 27th, Michael Spence offers suggestions on how to avoid the deepening of an asset deflation overshoot which has already begun, and will likely get worse if not attended to by leaders in both industrial and developing economies. Key highlights include coordinated actions by the government and private sector to recapitalize banks, direct intervention in housing markets, IMF coordination of reserve surplus countries,  and private corporation stock buy-back programs. Please access the article here.

Michael Spence Comments on the Current Global Imbalances and their Impact on Growth and Development

Submitted by Administrator on Mon, 10/20/2008 - 14:23.

In an opinion piece that is being carried by various publications around the world, Growth Commission Chair Michael Spence discusses how the current credit crisis in the U.S. and other G-8 countries can influence growth in developing countries. In particular, Dr. Spence stresses the evolving nature of global interdependencies, and the need for proactive coordination in warding off future crises. Please read more and offer your thoughts by accessing the article here.

Williamson versus the Washington consensus?

Submitted by John Williamson on Sun, 10/12/2008 - 21:35.
Williamson versus the Washington Consensus?
 
It seems that the deliberations of the Spence Commission once again involved discussion of the merits of my child (her illegitimate brother, according to my daughter) the Washington consensus. It seems also that my intellectual position on three crucial policy issues put me at odds with a common conception of the Washington Consensus. The three issues are exchange rate policy, capital controls, and privatization.
 
On exchange rates, I have long favored intermediate regimes to fixed or floating rates, on the grounds that there are other objectives besides avoiding speculative crises, notably avoiding Dutch disease, and that one can tame capital movements by other techniques than allowing exchange rates to float. The Washington consensus has sometimes been interpreted as implying support for the bipolar position that one has to fix or float and cannot logically do anything in between: see, for example, Dani Rodrik’s augmented Washington consensus. So Williamson is against the Washington consensus, certainly in its augmented version.

Fundamentalists versus Realists

Submitted by Paul Romer on Mon, 10/06/2008 - 04:27.

Debate among economists about the $700 billion Paulson plan reveals a deep divide between realists and fundamentalists. If economists and policy makers pay attention to how the tension between these two positions plays out in this particular debate, it will help us know how to deal with it in other areas, including development.

The formal, model-based approach of the fundamentalists has contributed much to progress in economic analysis. At key junctures, it has also made important contributions to policy. The challenge is to maintain an intellectual environment that leaves space for a conversation with realists as well. In complicated policy contexts where models don't yet capture key forces, the realists have much to offer both policy makers and fundamentalist modelers. By giving voice to observations that strike realists as obvious but that are not accepted in conversations dominated by fundamentalists, the report by the Commission on Growth and Development could encourage a richer, more open debate about the policy options for poor countries. 

Michael Spence Comments on U.S. Financial Crisis on the Politico's 'The Arena'

Submitted by Administrator on Thu, 10/02/2008 - 09:17.

Michael Spence has commented on the U.S. Financial crisis, and the implications of a rescue package for risk reduction and the availability of credit. Read his, and other experts' analysis of the current financial situation here.