At his Sabanci lecture yesterday on ‘Emerging Nations and the Evolving Global Economy’, Kaushik Basu predicted that sluggish growth will likely prevail overall for the next two years, as the baton of economic growth is handed over from industrialized countries to developing countries. He cautioned that countries have bought time with liquidity injections and other stimulus measures, but that will not do anything to fix deeper structural problems.
Kaushik elaborated on some of his ideas for getting the world out of the current ‘time-buying’ phase in an April 23 piece in Project Syndicate op ed ‘Two Policy Prescriptions for the World Economy.’ Dani Rodrik was especially taken with Kaushik’s opening line that “One thing that experts know, and that non-experts do not, is that they know less than non-experts think they do.” This pointed to the hard truth that the austerity debate has revealed that policy setting in today’s world is a highly uncertain business and that humility should be the order of the day.
Indeed, Rodrik’s post, titled ‘On Experts, Knowledge and Advocacy,’ suggested that the phrase should be hung on experts’ walls.
Kaushik’s Project Syndicate piece also calls for some portion of stimulus measures to target labor as a means of spurring job creation, something very much worth reflecting on in a week where workers, unions and the unemployed around the world observed May Day with protests, mourning, and continued concern about how to better harness globalization in ways that benefit not just the well-heeled and wealthy, but also poor people, whether farmers in the field or workers toiling at every stage of the value chain.