Responding to COVID-19: Priorities Now and Preparing for the Future

What have we done so far and what are some of the early lessons? Some thoughts on these two vital questions follow.

The crisis now The COVID-19 crisis is the largest shock to the global economy since the 2008–09 global financial crisis, maybe since the Great Depression of the early 1930s. To avoid overwhelming their health care systems, governments have sought to slow down the spread of the virus by implementing various suppression policies. They have made the case that social distancing measures are central to these efforts, as shown by the recent experience of Korea, Singapore and Taiwan, where various combinations of lockdowns, testing and contact tracing appear to have slowed down the rate of infections. The shocks to the economy have been multiple and mutually reinforcing. Business closures, travel bans and other transportation disruptions have undermined consumer spending and business confidence and could lead to a sharp increase in bankruptcies. Dismissals, layoffs, shortened work…

Latin America under Fire! What is to Be Done?

The past few months have witnessed violent demonstrations in several Latin American countries, including Chile, the only country from the region (other than Mexico) to have joined the OECD, the rich-country club. Moises Naim and Brian Winter recently published a thoughtful article in Foreign Affairs, titled “Why Latin America Was Primed to Explode”(October 29), in which they make a strong case that following the commodity boom of the early part of the previous decade the recent past has seen a sharp deceleration of economic growth. “Against the backdrop of stagnating wages and rising costs of living, indignities such as inequality and corruption have become more difficult for many people to swallow,” they persuasively argue. I put forward here some reflections on the economic growth debate and what this means for Latin America.
What about economic growth?

Economists—I am one of them—have long studied and argued about the sources and consequences of economic growth. The great development…