Joseph E. Stiglitz's Blog

July 9, 2014

Does Tony Abbott's government understand what deregulation and liberalisation have done to the US economy, asks Joseph Stiglitz

For better or worse, economic policy debates in the United States are often echoed elsewhere, regardless of whether they are relevant. Australian prime minister Tony Abbott's recently elected government provides a case in point.

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Published on July 09, 2014 05:33 • 26 views

June 9, 2014

Viewing economic policies through the lens of learning provides a different perspective on many issues, writes Joseph Stiglitz

Citizens in the world's richest countries have come to think of their economies as being based on innovation. But innovation has been part of the developed world's economy for more than two centuries. Indeed, for thousands of years, until the Industrial Revolution, incomes stagnated. Then per capita income soared, increasing year after year, interrupted only by the occasional effects of cyclical fluctuations.

The Nobel laureate economist Robert Solow noted some 60 years ago that rising incomes should largely be attributed not to capital accumulation, but to technological progress to learning how to do things better. While some of the productivity increase reflects the impact of dramatic discoveries, much of it has been due to small, incremental changes. And, if that is the case, it makes sense to focus attention on how societies learn, and what can be done to promote learning including learning how to learn.

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Published on June 09, 2014 03:06 • 284 views

May 8, 2014

Once notorious for drug gangs, Colombian city offers lesson in how to create 'liveable cities' in which citizens can flourish and innovate, writes Joseph Stiglitz

Last month, a remarkable gathering occurred in Medellín, Colombia. About 22,000 people came together to attend the World Urban Forum and discuss the future of cities. The focus was on creating "cities for life" that is, on promoting equitable development in the urban environments in which a majority of the world's citizens already live, and in which two-thirds will reside by the year 2050.

The location was symbolic: once notorious for its drug gangs, Medellín now has a well-deserved reputation as one of the most innovative cities in the world. The tale of its transformation holds important lessons for urban areas everywhere.

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Published on May 08, 2014 06:39 • 251 views

April 2, 2014

Challenge for leaders is to devise effective regulatory regimes that are health-conscious and appropriate at this stage

No country in recorded history has grown as fast and moved as many people out of poverty as China over the past 30 years. A hallmark of China's success has been its leaders' willingness to revise the country's economic model when and as needed, despite opposition from powerful vested interests. And now, as China implements another series of fundamental reforms, such interests are already lining up to resist. Can the reformers triumph again?

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Published on April 02, 2014 16:36 • 307 views
Challenge for leaders is to devise effective regulatory regimes that are health-conscious and appropriate at this stage

No country in recorded history has grown as fast and moved as many people out of poverty as China over the past 30 years. A hallmark of China's success has been its leaders' willingness to revise the country's economic model when and as needed, despite opposition from powerful vested interests. And now, as China implements another series of fundamental reforms, such interests are already lining up to resist. Can the reformers triumph again?

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Published on April 02, 2014 07:58 • 225 views

March 26, 2014

Why are an increasing number of developing countries resorting to expensive sovereign-bond issues?

In recent years, a growing number of African governments have issued Eurobonds, diversifying away from traditional sources of finance such as concessional debt and foreign direct investment. Taking the lead in October 2007, when it issued a $750m (£485m) Eurobond with an 8.5% coupon rate, Ghana earned the distinction of being the first Sub-Saharan country other than South Africa to issue bonds in 30 years.

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Published on March 26, 2014 07:55 • 338 views
Our panel of experts share their advice for the incoming Bank of England governor as he starts his first day in the job
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Published on March 26, 2014 07:55 • 307 views
Instead a negotiation process that is neither democratic and or transparent is likely to perpetuate a managed trade regime

Though nothing has come of the World Trade Organisation's Doha development round of global trade negotiations since they were launched almost a dozen years ago, another round of talks is in the works. This time the negotiations will not be held on a global, multilateral basis. Rather, two huge regional agreements one transpacific, and the other transatlantic are to be negotiated. Are the coming talks likely to be more successful?

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Published on March 26, 2014 07:55 • 349 views
If the debt vultures have their way, there will never be a fresh start for indebted countries - and no one will agree to restructuring

A recent decision by a United States appeals court threatens to upend global sovereign debt markets. It may even lead to the US no longer being viewed as a good place to issue sovereign debt. At the very least, it renders non-viable all debt restructurings under the standard debt contracts. In the process, a basic principle of modern capitalism that when debtors cannot pay back creditors, a fresh start is needed has been overturned.

The trouble began a dozen years ago, when Argentina had no choice but to devalue its currency and default on its debt. Under the existing regime, the country had been on a rapid downward spiral of the kind that has now become familiar in Greece and elsewhere in Europe. Unemployment was soaring, and austerity, rather than restoring fiscal balance, simply exacerbated the economic downturn.

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Published on March 26, 2014 07:55 • 239 views
The eurozone may be growing again but, in any meaningful sense, an economy in which most people's incomes are below their pre-2008 levels is still in recession

When the US investment bank Lehman Brothers collapsed in 2008, triggering the worst global financial crisis since the Great Depression, a broad consensus about what caused the crisis seemed to emerge.

A bloated and dysfunctional financial system had misallocated capital and, rather than managing risk, had actually created it. Financial deregulation together with easy money had contributed to excessive risk-taking. Monetary policy would be relatively ineffective in reviving the economy, even if still-easier money might prevent the financial system's total collapse. Thus, greater reliance on fiscal policy increased government spending would be necessary.

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Published on March 26, 2014 07:55 • 244 views

Joseph E. Stiglitz's Blog

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