Economic Growth Officers' Conference

Didn't know USAID had economic growth officers- I wonder what Prof. Easterly would say about it. Anyway I have collated some of the the podcasts of the sessions below- Romer's session is highly recommended.

Technology Drive Growth, Rules Drive Development
Paul Romer, Stanford University
Steve Radelet, Department of State

The Millennium Development Goals: The Road to 2015

Global Climate Change: Impact on Agriculture and Costs of Adaptation

Global Climate Change: Leveraging Investment Flows for Mitigation

Reinventing Government: Designing Programs to Enhance Public Sector Effectiveness and Performance
H.E. Minister Imad Fakhoury, Ministry of Public Sector Development, Government of the Hashemite Kingdom of Jordan
Ms. Widad Qutaishat, Results-Oriented Government Component Lead, USAID/Jordan Fiscal Reform II Project, DAI
Dr. Emil Bolongaita, Director, Management Systems International
Moderator: Dr. Mark Gallagher, Chief of Party, USAID/Jordan Fiscal Reform II Project, DAI

A Behavioral Approach to Economic Development
Sendhil Mullainathan, Poverty Action Lab and Harvard University
Michael Kremer, Harvard University

Government ICT Applications that Save Businesses Time and Money
Valentina Mintah, Crown Agents
Efrain Laureano, Chemonics International
Judy Payne, USAID/EGAT/I&E/ICT

Accelerating Job Creation and Growth
Steve Kapsos, ILO/Geneva
Mary Hobbs, USAID/Kosovo
Eduardo Tugendhat, CARANA Corporation
Lili Stern, U.S. Department of Labor

Access to Innovative Financial Services

World Bank’s Doing Business Indicators: Lessons Learned and New Directions
Svetlana Baguadinova, Doing Business Project, The World Bank
Rita Ramalho, Enterprise Analysis Unit, The World Bank
Carolin Geginat, The World Bank

Monitoring and Evaluation for Economic Growth

Shared Growth Diagnostics: Finding the Binding Constraint to Growth and Poverty Reduction

USAID Economic Growth Programming: Ultimate Impacts

Author Blog of the Day- Daniel Ben Ami

danielbenam

Australian Budget 2010-11, assorted

Budget Overview

What I wrote on Budget Day: Aid;

The story behind the $1 billion is that Australia has promised to increase development aid to 0.5 per cent of its Gross National Income (as I explain here (link to critique of Henry Review from last week), National Income and not the more commonly used Domestic Product is the right basis for most calculations. Unfortunately for the government (at least in this instance), a recent agreement by statistical agencies has changed the way GNI is calculated. Australia’s statisticians were the first to implement this change, and the result was to increase our GNI by 4 per cent, or about $50 billion.

Budget 2010 – It’s no Sex & The City 2

Federal budget 2010-11 – a sad document

Overall score: 4/10 – too much emphasis on the surplus and not enough emphasis on jobs and living standards.

Generating a Social Surplus;

Too often when evaluating the budget, we tend to focus on the accounts. To be sure, making sure the government has enough revenue to pay the bills is central to the process. But at its core, it is about economic policy-making. So on that level, we need to think broadly about economic benefits and costs.

IMF's Fiscal Monitor

See the transcript of the discussion of the FM;

QUESTIONER: Hi. One, I have a basic math question I’m trying to understand and then a sort of broader question.

So, you’re saying overall for the advanced G-20 countries, by 2030 the debt increases by 40 percentage points or thereabouts. And so to get it to a safe level they have to reduce the deficit by 8.5 percentage points over 10 years -- 8.75, sorry. How does that math work? Why does 8-3/4 get you 40 percentage points?

And then secondly, a sort of broader philosophical question, so you have a variety of tax increases and spending cuts, why don’t you have built in there, since you’re saying growth is so important, growth measures that you would score in the same way you’re scoring this?

MR. COTTARELLI: Let me start from the second one. Of course, there is a recovering growth in the projections, but there is no major increase in potential growth. The reason why we have not done this is to be, in a way, on the cautious side because these reforms in this area are extremely important but it’s difficult to calculate when they will yield benefits.

So, I think that while all countries facing fiscal adjustment should implement the measures to boost potential growth, I think it would be a bit risky to assume from the beginning that potential growth would pick up more strongly than expected, than before the crisis.

What countries, in our view, should do is to base fiscal adjustment on relatively conservative projections on output growth and then hope, to have the strong expectation, that through reforms it would be possible to improve potential growth and there would be upside surprises.

But in terms of measuring risk, I think it would be better not to base fiscal adjustment plans on the expectation that potential growth will be higher than before the crisis. Actually, it is better to be cautious.

On your specific question, the difference is between flows and stock. The improvement in the primary balance is an improvement in the flow and that of course is not from the first tier. It’s a gradual improvement, but it’s an improvement in the flow, in the primary position every year. As a result of this, at the end, you get a decline in the debt ratio by about -- with respect to the baseline and to the starting point, by about 35, 40 percentage points. We can perhaps go through separately to do the math later on at the end.

Jobs at World Bank- Economist position at DEC

The Development Prospects Group (DECPG) is looking for an economist to join its modeling team with a focus on long-term economic developments on diverse topics such as agriculture, energy, climate change, poverty and the other Millennium Development Goals, and the interface between finance and development. The position is based in the Washington, DC headquarters of the World Bank.

Requirements include;

Advanced degree in economics (preferably a Ph.D.) with specialization in one or more of the following fields (agricultural, energy or environmental economics, CGE modeling, micro-simulation techniques, macro modeling)

Experience with CGE modeling, GAMS and/or Stata

Why is growth stronger in expenditure-driven corrections?

Interesting recent paper;

Goldman Sachs Global Economics, Commodities and Strategy Research- Limiting the Fall-Out from Fiscal Adjustment (via Irish Economy blog)

In a review of every major fiscal correction in the OECD since 1975, we find that decisive budgetary adjustments that have focused on reducing government expenditure have (i) been successful in correcting fiscal imbalances; (ii) typically boosted growth; and (iii) resulted in significant bond and equity market outperformance. Tax-driven fiscal adjustments, by contrast, typically fail to correct fiscal imbalances and are damaging for growth....

In a landmark paper in the mid-1990s, the economists Alberto Alesina and Roberto Perotti found that economic growth fared much better during large fiscal corrections that were (i) decisive rather than gradual and (ii) relied on reductions in current government spending, rather than cuts in public-sector investment or higher taxes.

Hidden Wealth of Nations

The Hidden Wealth of Nations by David Halpern
Table of Contents
Preface and Introduction.
Chapter One: Prosperity and wellbeing.
Chapter Two: Not getting along.
Chapter Three: The politics of virtue.
Chapter Four: Fairness and Inclusion.
Chapter Five: Power and Governance.
Chapter Six: Conclusion.

Must read for the Economic Policy Maker

Policymakers Beware: The Use and Misuse of Regressions in Explaining Economic Growth

Book recommendation on India

Regional Growth Dynamics in India in the Post-Economic Reform Period
Biswa Swarup Misra

BISWA SWARUP MISRA heads the Department of Economic Analysis and Policy at the Patna office of the Reserve Bank of India. He was an Economist at the Union Bank of India from 2001-2002. He is a core team member in Reserve Bank's research reports and resource person for policy documents. He has published in Banca D'Italia's Conference Volume of Workshop on Public Finance, Reserve Bank's Occasional Papers, the Journal of Quantitative Economics, and the Indian Economic Journal.

It's the policies that matter?

Institutions vs. Policies: A Tale of Two Islands;

Recent work emphasizes the primacy of differences in countries' colonially-bequeathed property rights and legal systems for explaining differences in their subsequent economic development. Barbados and Jamaica provide a striking counter example to this long-run view of income determination. Both countries inherited property rights and legal institutions from their English colonial masters yet experienced starkly different growth trajectories in the aftermath of independence. From 1960 to 2002, Barbados' GDP per capita grew roughly three times as fast as Jamaica's. Consequently, the income gap between Barbados and Jamaica is now almost five times larger than at the time of independence. Since their property rights and legal systems are virtually identical, recent theories of development cannot explain the divergence between Barbados and Jamaica. Differences in macroeconomic policy choices, not differences in institutions, account for the heterogeneous growth experiences of these two Caribbean nations.

China quote of the day

It would be a historic irony if the Chinese Communist party was thrown into crisis, not by the collapse of communism in 1989 – but by the convulsions of capitalism in 2009.

-China’s economy hits the wall

North and South Korea - a comparison

-Economic Survey of Korea 2008: Priorities for Macroeconomic Policy

Irish reading for the Day- PRSP of Ireland?

Building Ireland’s Smart Economy

Basics- Finding binding constraints to growth

One economics, many recipes, -Rodrik interview

Podcast of the Day

The Growth Report: Strategies for Sustained Growth and Inclusive Development

The panel discussion featured two members of the Commission, Robert Solow, Nobel Laureate and MIT Professor Emeritus, and Danny Leipziger, Vice-President of the World Bank. Columbia professors Jagdish Bhagwati and Guillermo Calvo hosted the guests and provided comments and discussion.

Related;
The Catch-Up Game;
F&D: The Growth Report says that "sustainable high growth is catch-up growth and the global economy is the essential resource." What do you mean by that?

Spence: We called it catch-up growth because of the global economy's contribution to growth—which we found was an essential element after looking at the dynamics of the successful high-growth cases. It is pretty well understood from trade theory and modern growth theory that global markets are big and a country can grow pretty fast without expanding its market share much—and if it has the terms of trade. But the other part, which is emphasized by Paul Romer and other distinguished leaders in the area of growth theory, is that catch-up growth is really about learning. It's about knowledge transfer. It's expanding your potential output based on what the economy—both the private and public sector sides—comes to have expertise in doing, and that is the catch phrase, no pun intended, for catch-up growth. This is what, we believe, more than anything else enables countries to grow at rates in the 7–10 percent range, and nobody else can do that. You can't do it in isolation and you can't do it as an advanced country with no counterexamples because you have to invent all the technology that moves the production possibility out, whereas developing economies can, at least for a period of time, import it. You have to import it and adapt it so it takes a considerable amount of ingenuity, innovation, and adaptation.

Mohieldin: The 13 successful cases [in The Growth Report] of sustained high growth since the Second World War used their integration with the world in a very successful way through the vehicles of knowledge—obtaining it either directly by sending people to get educated abroad, or getting them through training programs—or even through foreign direct investment.

I am from a generation that was taught that the three pillars of any economic activity were land, labor, and capital, and when you added them together with an entrepreneur, you would see the marvels of economic activity. Today those three pillars have been replaced. In an interesting piece of work, Professor Romer discusses endogenous growth, and—according to him—the three new aspects of development are, first, learning, innovation, and the transfer of ideas. Second, labor has been replaced by "people," not just those who are in the workplace but those who could be in the workplace as well as those who are communicating with them. Third, to be safe, they added "other things," which could be anything such as capital, additional resources, etc. So today the three pillars are ideas, people, and other things.

The success stories of Singapore, Malaysia, Korea, China, and, more recently, India and Vietnam are based on these new pillars, rather than the traditional ones. And further integration with the rest of the world can benefit countries even more. This means globalization is going to remain relevant, even though I'm saying so at a time when people might be questioning the very merits of globalization.

The Ingredients of Sustained High Growth

Why is Africa poor and what (if anything) can the West do about it?

Want to know more, follow this course.

Photo of the Day- What Joy is like in Castro's Cuba

-The End of the End of the Revolution

UN's World Economic Situation and Prospects 2009

Advance release of the first chapter, Global Outlook 2009

This n That

US global dominance 'set to wane'

Price Fishback: What Do the New Deal and World War II Tell Us About the Prospects for a Stimulus Package?

Lebanon: Letter of Intent and Technical Memorandum of Understanding

Should We Be Worried About Deflation?

Eric Rauchway Translates John Maynard Keynes

Cowen on Great Depression

Thoughts on reading the October CPI

International finance and economic growth

microfoundations of institutional theory

Limitations of Growth Diagnostics

Rethinking the Growth Diagnostics Approach: Questions from the Practitioners