Showing posts from 2008

We Cannot Know that 2009 will NOT Witness Start of a Recovery

Published in Editorial Page of Financial Times , 4 December 2008 Letter to the Editor Dear Sir/Madame, Professor Roubini’s fairly grim assessment of the 2009 global economic outlook (“How to avoid the horrors of ‘stag-deflation’”, 3 December) is a detailed analysis of why the horrors are, in fact, unavoidable. It is consistent with his unremittingly pessimistic views not only about the depth of the crisis, but also about the ineffectiveness of policy to mitigate its aftereffects. He speaks with considerable credibility on these issues, having anticipated the deleterious impact of the bursting of the U.S. housing bubble on the financial markets and the real economy. While he may well be right, I would like to suggest that, in fact, we do not know whether 2009 will not witness the beginnings of a recovery, in response to an unprecedented combination of looser monetary policies, fiscal stimuli and the whole battery of government-sponsored interventions which have taken place over the rece

A Global Economy Needs Global Economic Governance

Mr. Peter Mandelson, the European Union's Trade Commissioner, has written a thoughtful Op Ed ( In defence of globalisation , The Guardian, October 3 2008) whose key message—namely, that "a global economy needs global economic governance"—is not only extremely timely, but may, in fact, be broadened in the scope of its underlying recommendation. The process of globalisation is unfolding in the absence of equivalent progress in the creation of an international institutional infrastructure that can support it and enhance its potential for good. There is no global environmental authority; policy in this area is being done via ad hoc approaches involving elements of international cooperation, voluntary compliance, and large doses of hope. In the absence of a body with jurisdiction over the global environment and the associated legal enforcement authority, de facto, the international community has abdicated management of the world's environment to chance and the actions of a

The EU Needs a New Business Model

Note: A keynote speech delivered on 19 September 2008 at the European Business School Symposium in Frankfurt. Words ought to be a little wild, for they are the assault of thoughts upon the unthinking. J. M. Keynes The rejection by the Irish of the Lisbon Treaty has led to much soul-searching in Brussels and elsewhere in Europe. Putting aside the question how the EU got itself in this particular predicament, namely, allowing 1 million voters, accounting for 0.2 percent of the EU's total population to veto a 269-page treaty teeming with bureaucratese of mind-boggling opaqueness, the debate-still on going as we speak-is not likely to go very far. The fact is that it is not the Irish that are to be blamed-one should in general not put to referenda questions which cannot fit in less than one page and even that is risking it. It might be useful to review briefly here, at the outset, the content of some of this soul-searching. One can identify several schools of thought. • There are some

The Challenges of Sustainable Development

Note : A slightly edited version of this article appears in the Spanish August/September issue of the journal Foreign Policy . A broadly accepted definition of “sustainability” is that put forward by the Brundtland Commission convened by the United Nations 25 years ago, which stated that sustainable development is development “that meets the needs of the present without compromising the ability of future generations to meet their own needs.” One implication of the core idea embodied in this definition is that sustainability is not a goal to be reached, but rather a balance to be maintained across space and time in which there are complex interactions at play between the environment, the economy, human institutions and values. [ 1 ] Two central questions in this debate are: what has actually happened to development during the past half a century and are we on a sustainable development path? Development as a global objective for improving human welfare is a relatively recent concept. It