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Friday round up: Q&A with Kaushik Basu, Challenges to Growth, Income Equality and Aid

LTD Editors's picture

India's Telegraph newspaper reports on a Q&A Kaushik Basu had recently with economist/filmmaker Suman Ghosh.

Nobel laureate Michael Spence writes on Project Syndicate about The Real Challenges to Growth.

World Bank President Jim Yong Kim shares his views on LinkedIn on how income inequality ought to be discussed at Davos.

Big Data Diving and US Intergenerational Income Mobility Hold Vital Lessons

Vamsee Kanchi's picture

Patterns of intergenerational income mobility in the United States reveal valuable lessons for economists and policy makers not just in this country, but also for the developing world, where successful efforts to promote shared prosperity and foster create better prospects for youth and children too often meet with frustration.

Raj Chetty, Professor of Economics at Harvard University lectured on this topic recently at the World Bank. For his talk, Chetty drew on recent research by him, Nathaniel Hendren, Patrick Kline and Emmanuel Saez. Chetty and team analyzed anonymous tax records on earnings of 40 million US children and their parents to gauge a child's chances of moving up the income distribution relative to his or her parents.

Relative risk ratings and shadow sovereign ratings for 120+ countries

Dilip Ratha's picture

Sovereign credit ratings assigned by the major rating agencies (such as Fitch, Moody’s and Standard and Poor’s) play a major role in determining the government’s access to international capital markets. Although sovereign ratings relate to debt and creditworthiness of the central government, in effect they serve as a barometer of confidence and a ceiling for creditworthiness for the private sector as well. They influence the borrowing costs of private entities and in a wider sense overall investment flows. The sovereign rating is often a benchmark and sub-sovereign entities, such as companies and banks, rarely get a rating higher than the sovereign’s.

From shock therapy to sustainable development

Hans Timmer's picture

Last week I attended the Gaidar Forum in Moscow. Yegor Gaidar was an economist who became the architect of the Russian market economy as deputy prime minister of the Russian Federation in 1992. Like Leszek Balcerowitz in Poland and Vaclav Klaus in Czechoslovakia, Gaidar was a pioneer of the shock therapy: rapid liberalization of prices; opening up of borders to allow free international trade; and privatization of capital. Gaidar died in 2009 at an age of 53. In his memory the Gaidar Forum was organized for the first time in 2010. This was the fifth time the Russian Presidential Academy of National Economy and Public Administration organized this annual conference that brings together ministers, academics, and business people.

Mime your manners

Ryan Muldoon's picture

The following post is a part of a series that discusses 'mind and culture,' the theme of the World Bank’s upcoming World Development Report 2015.

When the former Mayor of Bogota, Antanas Mockus, began his first term in office, a major quality of life problem in the city was the awful traffic, aggravated by reckless driving and mass disobedience of traffic rules. The situation increased air pollution, reduced labor productivity, and created a sense that the city was dysfunctional. The traffic police were at the time notoriously corrupt:  drivers had merely to bribe the police to avoid more substantial penalties for traffic violations. Mockus fired all the traffic police and in their place hired approximately 400 mimes. The mimes were trained to mock people’s traffic violations and to demonstrate better behavior. The mime demonstrations succeeded - traffic improved greatly and traffic fatalities declined 50% in the center city where the mimes operated. Traffic police were later reinstated after retraining, but already traffic flowed more smoothly. (See here)

Friday round-up: Of tapering, output gaps, microfinance, cows and world warnings ahead of Davos

LTD Editors's picture

Ylan Mui writes in the Washington Post about 'Why the World Shouldn't Fear the Taper,' which draws from Global Economic Prospects (GEP), launched earlier this week.

The Economist has a daily chart drawing from the GEP that illustrates output gaps in developing countries.

David Roodman has a new paper titled 'Armageddon or Adolescence? Making Sense of Microfinance's Recent Travails.'

Global Economic Outlook in One Thousand Words

Kaushik Basu's picture

[All numbers cited in this essay are from the World Bank’s latest Global Economic Prospects. The analysis is mine.]

The economic prospect for the world in 2014 is best described as uneventful. It is a strange world we live in that this is the good news. After six years of turmoil marked by financial crises and long stretches of recession in several countries, it is indeed heartening that we are headed for uneventful times with a slow pick-up in global growth.

The world in 2013 grew by 2.4%. We are forecasting a growth of 3.2% in 2014. This is the point forecast. There is a lot that is happening around it, with some countries expected to make a strong recovery, some weak, and some actually slowing. And for each country there are bands of possibilities around their respective point forecasts.

Johan Cruijff and European Migration

Hans Timmer's picture

For those of you who are not interested in soccer and for our young colleagues who are growing up with Messi and Ronaldo: Johan Cruijff was the best soccer player ever. At least according to his Dutch fans; skeptics can convince themselves here. As a player and coach he has won every conceivable prize for club teams, but he has become even more famous as an analyst. His judgments are so inscrutable for mere earthlings that his utterings are considered without exception as deep philosophical wisdoms. One of his more transparent quotes might give you already an impression: Soccer is simple, but it is difficult to play simple soccer. There must be deep insight also in Italians can't win the game against you, but you can lose the game against the Italians. People have collected over the years many more examples, but I want to discuss one of his more recent observations.

Friday round up: Antipoverty policies, academia and the developing world, inequality redux and five questions for 2014

LTD Editors's picture

Martin Ravallion's NBER working paper titled 'The Idea of Antipoverty Policy' is now accessible online and provides a long view on how the narrative around poverty evolved from the 1800s til now.

America's war on poverty turned 50 this week and Nick Kristof has a column titled 'Progress in the War on Poverty.'

A Free Exchange post draws from a paper by the WB's Quy-Toan Do, Jishnu Das and others in the JED. Their research analyzes the tendency of academic research to focus excessively on the US and to under-study the developing world.

Stuck in transition!

Hans Timmer's picture

A New Year traditionally comes with upbeat thoughts. New resolutions will make life better. Past mistakes will not be repeated. And calamities are seldom predicted. These positive thoughts are not always justified, but they provide necessary energy during the first cold months of the year all the same.

At the beginning of 2014 some economic optimism actually seems defensible. Five years after the start of the global financial crisis, Europe is finally exiting their recession, albeit slowly and hesitantly. The U.S. economy is accelerating and so is growth of global production and trade. True, the BRICs are no longer as vibrant as they have been for a long time, but growth in China (a key concern of markets in recent days) is still expected to be three and a half times growth in high income countries.

Given the tradition of New Year’s optimism it is salient that the EBRD starts the New Year on a rather gloomy note with their new Transition Report. The title of this year’s report is "Stuck in transition?." But in the text they change the question mark into a firm exclamation mark, even as the report contains some suggestions of ways to escape the current impasse.

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