Nabila Tabassum Chowdhury > Recent Status Updates

"Bill Easterly, not very charitably perhaps, but quite accurately, described their conclusion: “After two years of work by the commission of 21 world leaders and experts, an 11-member working group, 300 academic experts, 12 workshops, 13 consultations, and a budget of $ 4m, the experts’ answer to the question of how to attain high growth was roughly: we do not know, but trust experts to figure it out.”"

"The bottom line is that, much as in rich countries, we have no accepted recipe for how to make growth happen in poor countries."

"Those countries were also devastated by war before they started growing fast, so a part of the fast growth might have been just the natural bounce-back."

"Most banks in China are owned by the state. The government at both the local and the national level has played a central role in deciding how land and credit should be allocated."

"It seems relatively clear there are things to avoid: hyperinflation; extremely overvalued fixed exchange rates; communism in its Soviet, Maoist, or North Korean varieties; or even the kind of total government chokehold on private enterprise India had in the 1970s with state-ownership of everything from ships to shoes."

"There is little evidence of policies having independent traction, over and above the effects of institutional quality."

"Conversely, while it is true that countries with “bad” policies grow slower, they are also more likely to have “worse” institutions by the measures used in this literature (less business friendly, for example), and therefore it is not clear if they are doing poorly because of policies, or because of some other side effects of their poor institutions"

"(After all, the US Constitution of today is a very different document than when it was written, enriched by two hundred years of jurisprudence, public debate, and popular involvement.)"

"If we find growth is faster where education is higher, it could be due to these other policies it tends to be bundled with. And of course it is likely that people feel more committed to educating their children when the economy is doing well, so perhaps growth causes education, and not just the other way around."

"Bangladesh, famously described by Henry Kissinger as a “basket case” in the 1970s, has grown at a rate of 5 percent per year or more for most years in the 1990s and 2000s, and at above 7 percent in 2016 and 2017, which puts it among the twenty fastest growers in the world."

"As Romer wrote in 2008: “The knowledge needed to provide citizens of the poorest countries with a vastly improved standard of living already exists in the advanced countries.”"

"Of course, for most economists and many businessmen, growth in poor countries is also important because of its implications for human welfare."

"But, suddenly, a couple of decades ago, poor countries became interesting."

"Even if the increase in industry concentration is partly responsible for the slowdown of growth in the United States, it would be unreasonable to conclude that breaking up monopolies will single-handedly restore fast growth."

"This result does suggest that the relatively low growth in TFP may in part be explained by the increase in concentration."

"But if monopoly is guaranteed forever anyway, innovation and growth may slow down; a monopolist can sit on their hands and never invent anything new. Some evidence suggests something like this is happening now."

"In the logic of Aghion and Howitt, the promise of (temporary) monopoly power, through a patent, spurs innovation, and this innovation in turn results in the new technologies everyone will eventually be able to use. This is what causes growth."

"For example, the share of the top four companies in a sector’s revenues has increased in every sector. In manufacturing, the top four accounted for 38 percent of revenues in 1980 and 43 percent in 2012. In retail trade, the share more than doubled, moving from 14 percent to 30 percent."

"Companies that innovate need access to markets to sell their products. And some evidence suggests this is becoming increasingly difficult for new entrants."

"innovation does not come out of nowhere; someone needs to have a financial incentive to invent something new."

"In a policy world that has mostly abandoned reason, if we do not intervene we risk becoming irrelevant, so let’s be clear. Tax cuts for the wealthy do not produce economic growth."

"The repetition of this mantra by generations of serious economists has given it the soothing familiarity of a lullaby. We still hear it every day from a gaggle of business experts, who even today feel unconstrained by the data."

"One answer, of course, is that it was not the only instance where the administration asserted a non-truth to support its decision."

"By now, there seems to be a consensus among a large majority of economists that low taxes on high earners are not guaranteed to, on their own, bring about economic growth."

"In his world, sometimes the creative dominates, but at other times the destructive holds sway; novelties get created not because they are useful but because they defeat someone’s existing patent. Making it more rewarding to innovate might backfire as a result."

"This story suggests charter cities are unlikely to hold the key to sustained growth in developing countries for the very good reason that the internal political compulsions the charter is intended to hold at bay often have a way of biting back."

"Moretti concludes from his reading of this entire literature that regional development is unlikely to be the lever that will help us avoid the end of growth."

"The cities where Amazon eventually locates will grow, but partly that will be at a cost to other American cities. Moretti estimates the two effects might actually net out, with the result that national growth will be more or less unaffected."

"We have already seen that growth is hard to measure. It is even harder to know what drives it, and therefore to make policy to make it happen."

"As a result, high growth can keep going forever as more and more high-skilled people come together, even without help from Solow’s mysterious exogenous productivity growth."