“To succeed in life, you have to study hard and obtain your diploma with honors so that you can eventually land a high-paying job,” is what my father would tell me constantly. As a young girl, everything was clear to me: a diploma with honors would automatically land me a job with a salary as high as Bill Gates’s.
Call it “secular stagnation,” or the disappointing “New Mediocre,” or the baffling “New Normal” – or even the back-from-the-brink “contained depression.” Whatever label you put on today’s chronic economic doldrums, it’s clear that a slow-growth stall is afflicting many nation’s economies – and, seven years into a lackluster recovery from the global financial crisis, some fragile economies seem to be lapsing into another slump.
As policymakers struggle to find a plausible prescription for jump-starting growth, a tug-of-war is under way between techno-utopians and techno-dystopians. It’s a struggle between optimists who foresee a world of abundance thanks to innovations like robot-driven industries, and pessimists who anticipate a cash-deprived world where displaced ex-workers have few or no means of earning an income.
To add a bracing dose of academic rigor to the tech-focused tug-of-war, along comes a data-focused realist who adds a welcome if sobering historical perspective to the debate. Robert J. Gordon, a macroeconomist and economic historian at Northwestern University, takes a longue durée perspective of technology’s impact on growth, wealth and incomes.
Gordon’s blunt-spoken viewpoint has caused a sensation since his newest book, “The Rise and Fall of American Growth,” was launched at this winter’s meetings of the American Economic Association. His analysis injects a new urgency into policymakers’ debates about how (or even whether) today’s growth rate can be strengthened.
When Gordon speaks at the World Bank on Thursday, March 31 – at 11 a.m. in J B1-080, as part of the Macrofiscal Seminar Series – economy-watchers can look forward to hearing some ideas that challenge the orthodoxies of recent macroeconomic thinking. His topic – “Secular Stagnation on the Supply Side: Slow Growth in U. S. Productivity and Potential Output” – seems likely to spark some new thinking among techno-utopians and techo-dystopians alike.
To watch Gordon’s speech live via Webex – at 11 a.m. on Thursday, March 31 – click here. To dial in to listen to the audio, dial (in the United States and Canada) 1-650-479-3207, using the passcode 735 669 472. For those telephoning from outside the United States and Canada, the appropriate numbers can be found on this page.
- Income Inequality
- Global Inequality
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- Macroeconomics and Fiscal Management
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- macroeconomic policy
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The popular image of the out-of-school, out-of-work youth of Latin America is not generally a positive one. For one thing, the term used to label them – “ninis” – defines them in the negative. It comes from “ni estudian ni trabajan”, the Spanish phrase for those who "neither study nor work.”
Geographically, the capital of Solomon Islands, Honiara, is a hilly city, a maze of ridges and valleys.
In front of me, concrete steps descend 30 meters down the face of a ridge, winding their way down in a gravity-defying manner; nothing else stands on the slope, it’s simply too steep.
The steps are part of a system of footpaths that link communities of thousands of people below to the main public road above.
Over the past 60 years as Honiara has developed, so too have informal settlements. These are often located at the bottom of steep valleys without basic services such as roads, water and electricity.
The recent revolutions in the Middle East have brought even more urgency to the perennial challenge of how policies can help create better job opportunities for youth. North Africa, along with Sub-Saharan Africa and South India, has among the world’s highest population growth rates and as one widely quoted study put it, “the Arab Spring could not have occurred without the ideological and numerical push of a huge mass of angry youth.” Neighboring countries in Sub-Saharan Africa, which still has among the highest birth rates in the world, noticed.
These are some of the views and reports relevant to our readers that caught our attention this week
Remittances to developing nations to hit $500 billion in 2015 - U.N. official
An estimated 230 million migrants will send $500 billion in remittances to developing countries in 2015, a flow of capital expected to do more to reduce poverty than all development aid combined, a senior official of the U.N. agricultural bank said. Ten percent of the world's people are directly affected by this money, Pedro De Vasconcelos, programme coordinator for remittances with the International Fund for Agricultural Development, told a conference on Tuesday. "Migrants are investing back into poor regions," Vasconcelos said, adding that about $200 billion is expected to go directly to rural areas.
The Aid Industry- What Journalists Really Think
International Broadcasting Trust
There has been growing media criticism of the aid industry in recent years. Some of this has been ideologically driven and some opportunistic but it also appears that journalists are more insistent on holding aid agencies to account than they have been in the past. This is a good thing but often the aid sector has appeared unduly defensive in the face of criticism. This report seeks to understand what a broad range of journalists – both specialists and generalists – think about aid and the agencies that deliver it. The criticisms are wide ranging but several themes emerge. There’s a consensus that the aid sector as a whole needs to be more open and transparent. Since media reporting of the aid industry undoubtedly has a big influence on public opinion, it’s important that we take the views of journalists seriously. A better understanding of what journalists really think will also enable those working in the aid sector to deal more effectively with media criticism.
Africa’s combination of urban, educated, unemployed youth and economies still dominated by a narrow range of commodities and the public sector has spurred many to call for structural shifts in production and employment as part of an inclusive growth strategy. A recent entry into the debate is the 2014 African Transformation Report, launched last week by the African Center for Economic Transformation (ACET). As Homi’s and Julie’s post states, the depth, sophistication and pragmatism of the analysis are commendable. But if all the recommendations were implemented, what would they do for the employment prospects of today’s African youth? Not much. They would barely affect the job prospects of 90 percent of young people entering the labor force in this decade.
Between five and five-thirty in the morning is the only time she gets to herself, which she uses to work out, or read a book. After that, the grind of everyday life in Poland’s countryside takes over. She cooks, washes, cleans, irons, and cooks for her seven children, aged two to fifteen. And it doesn’t stop until late at night.
Elzbieta’s family and other families with multiple children are rather unique in Poland, which has one of the lowest fertility rates in the world. When asked why they didn’t have children in a recent country-wide survey, 71 percent of Poles said unstable employment and difficulties in balancing work and family life were big factors.
Their fears are not without reason -- with each child, the risk of poverty increases tremendously -- families with three or more children are more likely to be in the lowest income group, with 26.6 percent of households with four children living in poverty in Poland, according to the Main Statistical Office.
Even buying clothes for children is a daunting task, in such cases. “We have started participating in lotteries organized by local clothes stores, with no luck so far,” Elzbieta said. “We do it because taxes for children’s clothes and shoes were recently raised, and families like ours are most affected. Families with children are just not given a chance.”
Elzbieta talked to me as she picked flowers in a nearby field, while watching her five-year old daughter. The flowers she collected would later be dried on a bench outside her rural home and used for making herbal teas for the family. Even buying tea is a financial challenge for Elzbieta’s family, whose income, a total of PLN 3,280 (about $1,100) comes from social assistance for children, including a disabled child (PLN 2,000) and her husband’s income – after the payment of a home renovation loan – of PLN1, 280.
But hospitality is not to be spared.
Let’s face it. If we are ever going to successfully address the worldwide youth unemployment crisis, we need to act together — as a global community. That’s why last year, with the publication of Opportunity for Action, Microsoft and the International Youth Foundation called on leaders in the public, private, youth, and civil society sectors to join a “collective, massive and global” effort to expand job and livelihood opportunities for today’s youth.
Since then, there’s been a real sense of momentum on the issue, particularly among high-level policymakers. Just last week, the World Bank sponsored a lively roundtable discussion the day before its Annual Meetings in Washington, D.C. that echoed the urgent call for collective action around youth unemployment. Speaking to a packed hall filled with finance ministers, private sector executives, and development experts from around the world, the panelists at the “Boosting Shared Prosperity by Getting to Youth Employment Solutions” event offered concrete examples of practical and sustainable solutions to the current crisis. Yet the conversation kept returning to the need to act together to have real impact.