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Kaushik Basu's blog

A welcome address on IDAHOT 2016

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I am honored to address the World Bank event celebrating IDAHOT 2016; and to join the activists, scholars and Bank staff, who have gathered here to celebrate inclusion. The LGBTI community ought to be part of society in every sense and be included socially, economically, and politically.

Negative interest rates as a fishhook

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The State of the Global Economy


[Based on the opening remarks made at the Chief Economists’ Roundtable on “Growth and Inclusion in Turbulent Times”]
 
It is time for the annual Spring Meetings. Many of the world’s finance and development ministers, along with business and civil society leaders, are here is Washington and have been meeting with us at the World Bank this week to discuss what we can do to rise up to these challenging times. Most conversations have come to land on two important questions, namely: What is happening around the world in different regions? And: what can we do to stem the slowdown and disunity around the right policy way ahead?

Education is the topic for the new World Development Report

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Education is central to improving human welfare and to achieving the goals of eliminating extreme poverty and boosting shared prosperity.  Schooling was recognized as vital to achieving the MDGs, and it remains front and center in the SDGs.  Yet there has never been a World Development Report (WDR) on education.  

The poverty line’s battle lines

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For a long time, as a college professor and then as the chief economic adviser to the Indian government, I was a happy user of the World Bank’s data on global poverty, tracking trends and analyzing cross-country patterns. I seldom paused to think about how those numbers were computed. Then, three years ago, I joined the World Bank as its Chief Economist. It was like a customer, happily ordering dinner in a favorite restaurant, suddenly being asked to go into the kitchen and prepare the meal.

Development in the digital age

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I have spoken only once before at the UN. I was then just a professor and was invited to speak on my research on labor market regulation. I was told it would be a distinguished audience. However, as I got up to speak, almost all distinguished people seemed to leave the room. Only six hardy souls stayed behind to listen to me.

Remembering John Nash

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Last weekend, as my wife and I drove back to Washington after visiting James Madison’s home and the birthplace of the American constitution in Virginia, our daughter called to give us the news. John Nash and his wife, Alicia, had just been killed in a car accident on New Jersey Turnpike. The brutality of it was difficult to fathom. How could a person of such genius, after a life of so much struggle, battling schizophrenia and overcoming it, go in such a way?

India, China and our growth forecasts

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Last month, the World Bank and IMF both put out predictions that, this year, India would overtake China in terms of GDP growth rate. This caused a flutter and was widely reported around the world. How robust is this prediction and what does it really mean?

First, this is not as monumental a milestone as some commentators made it out to be. China has had one of the most remarkable growth runs witnessed in human history, having exceeded an annual growth of 9% from 1980 to now. Four decades ago its per capita income was close to India’s, but now it is four times as large as India’s. None of all this is going to change in a hurry.

With this caveat in mind, it is a year in which India deserves to feel good. It is expected to top the World Bank’s chart of growth rates in major nations of the world. This has never happened before. Before 1990, India did occasionally grow faster than China, mainly because China’s growth gyrated wildly during the pre-Deng Xiaoping period. It was, for instance, minus 27% in 1961, when Mao Zedong’s Great Leap Forward resulted in the world’s biggest famine, and it was 17% and 19% in 1969 and 1970, respectively--a relief in the wake of the Cultural Revolution. Fluctuations of this magnitude would be intolerable to India’s polity.

Human behavior, social norms, law and other big questions

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‘Development Economics: The Big Questions’ was the topic of a lecture I delivered April 7 at Georgetown University. During my talk, I touched on micro-theoretic issues related to Mind, Society, and Behavior (the topic of the WDR 2015) and as well as on governance and the law (the topic of the WDR 2017, which is in its very early stages).  From assumptions about rational actors, to the role of social norms, as well as lessons from game theory, I attempted to shed a rather different light on human foibles and the challenges of development than is typically expected from the World Bank. 

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