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Global Economy

Video interview with Joe Stiglitz on Financial and Real Crises in the World Economy

Merrell Tuck-Primdahl's picture

According to Nobel-winning economist Joseph Stiglitz, creating jobs amidst today’s low-demand, high-debt environment is a tall order. It will require viable structural employment policies, unemployment insurance for laid off people, and -- in the case of the US – facing up to the inevitable shift out of the manufacturing sector into services.  Stiglitz, who delivered a DEC Lecture at the World Bank on September 26 on ‘The State of the Global Economy: An Agenda for Job Creation’, warned that far more is broken than the banking and financial systems in high income countries. He argues that a lack of aggregate demand is a huge problem that can only be fixed through smart public as well as private investment in education, infrastructure, and innovative technologies to protect the environment. He also described the current phenomenon whereby productivity in manufacturing is exceeding the rate of growth in demand in the sector, which means jobs on factory floors are being shed. In other words, technical change can induce large distributive consequences and lead to long term unemployment. Listen to my interview with him about what can be done to cure our current ills.

Transitions can be good for growth

Caroline Freund's picture
Many of the Middle East and North African countries are embarking on transitions with the goal of developing more open and accountable governments.  Like the East Europeans and others before them, they will face challenges in the short run, as business is disrupted and investors wait for uncertainty to be resolved.  Evidence from 47 recent transitions shows that growth declines by about 3-4 percentage points, on average, during such transitions.  The good news is the decline tends to be short lived, with the dip lasting only one year and growth then resuming or exceeding pre-transition levels.

World Bank reforming to meet new challenges

Angie Gentile's picture

October 6, 2009 - Istanbul, Turkey. World Bank/IMF Annual Meetings 2009. Opening plenary session.

The World Bank is pursuing an ambitious program of reform to enable the institution to become more efficient and effective while also gaining more legitimacy among the developing countries that it serves, Bank President Robert Zoellick said today.

In a speech at the start of the World Bank-IMF annual meetings, Zoellick said the World Bank’s reforms would focus on improving development effectiveness, promoting accountability and good governance, and continuing to increase cost efficiency.

“To serve the changing global economy, the world needs agile, nimble, competent, and accountable institutions,” Zoellick told the meeting of the Board of Governors of the World Bank Group. “The World Bank Group will improve its legitimacy, efficiency, effectiveness, and accountability, and further expand its cooperation with the UN, the IMF, the other Multilateral Development Banks, donors, civil society, and foundations which have become increasingly important development actors.”

Public Opinion in Action in 2008

Sina Odugbemi's picture

The power of public opinion is the power of ordinary citizens; it is the power of aware, engaged multitudes. And there is a way of understanding the spectacular events of 2008 in terms of the power of public opinion. Let's take just a few.

1. The first is the crisis in financial markets and the global economy. Whatever technical experts eventually decide to be the origins of the crisis, there is no doubt that public opinion has played a role in intensifying the crisis. It has done so through the collapse of public confidence in financial institutions generally. For what is 'confidence' but the opinion widely shared that the financial system is sound and your savings and investments are safe? That collapsed in so much of the world in 2008, beginning in the United States. There is no doubt that restoring 'confidence' will be crucial to ending the crisis; that means, recreating majority opinion in the stability and secure management of the global financial system.


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