tag:blogger.com,1999:blog-1089082204850170942.post2376584064251912765..comments2024-03-21T12:52:08.166+11:00Comments on Freedom and Flourishing: When can economists adopt a contractarian approach to provision of policy advice?Winton Bateshttp://www.blogger.com/profile/07383561940886657594noreply@blogger.comBlogger2125tag:blogger.com,1999:blog-1089082204850170942.post-50638535556350586362019-01-02T20:22:59.833+11:002019-01-02T20:22:59.833+11:00Thanks for your comment Noric.
I haven’t read that...Thanks for your comment Noric.<br />I haven’t read that book by Martin Wolf. It sounds interesting. I have read quite a lot of his stuff in the FT over the years, and have been most impressed.<br /><br />I actually met Martin in London in the early 1980s when he was associated with an organisation called the Trade Policy Research Centre. I recall that we had a pleasant chat about the strong links between business people in Britain and Europe. Winton Bateshttps://www.blogger.com/profile/07383561940886657594noreply@blogger.comtag:blogger.com,1999:blog-1089082204850170942.post-76092785342551726612019-01-02T12:34:07.645+11:002019-01-02T12:34:07.645+11:00Winton: On a separate though related topic in that...Winton: On a separate though related topic in that it involves discussion of economic policy, I've been for some months reading Martin Wolf's 2014 book, The Shifts and the Shock: What We've Learned - and Have Still to Learn - from the Financial Crisis. Lacking deep economics knowledge I find it a tough read. However, some of the finest books for me are tough to read. Often I gain recognition of that in the downhill run of a book. <br /><br />I had that appreciation of Wolf's thinking today reading pages 182 to 184.<br /><br />Wolf there described three transformations or underlying drivers for the shift that took place from say the early 1970s to 2014, and I don't think it has changed that much to January 2019. These are three shifts he frames succinctly. <br /><br />(1) ECONOMIC LIBERALISATION SHIFT, not just in capitalist economies (with privatisation pushed by Margaret Thatcher and Ronald Reagan) but also in India, China after it embraced change from 1978 with Deng Xiaoping, and countries of the former Soviet Union. After the shift trade in services was liberalised to a degree that had not been the case before. Finance crossed borders more freely. The Maastricht Treaty was ratified in 1993 moving towards abolition of exchange controls and the EU currency union launched in 1999. The World Trade Organisation was formed and China joined in 2001.<br /><br />(2) TECHNOLOGY SHIFT, less so in transport (eg with improved container ships) but especially in information and communications technologies, contributing to greater and faster know-how transfers, eg the transfer of manufacturing processes and technologies to developing economies.<br /><br />(3) AGING SHIFT, with aging populations, especially in developed economies such as Germany and Japan, resulting in new economic imbalances. Very interestingly Wolf links the "chronically weak demand" that resulted from aging populations to "prolonged fiscal deficites (as in Japan) or by large current-account surpluses (as in Germany, the Netherlands and other northern European countries).<br /><br />Regarding these three shifts Wolf goes onto state: "These forces in turn help explain the low real rates of interest before 2007 and the still lower real rates after the crisis, which was caused in large part by the policy responses to pre-crisis recessionary forces."<br /><br />Thank you for your post, it inspired the above note taking, pulling together thinking on what may come next and what policy responses are needed by individuals, organisations, nation-states and global organisations.Noric Dilanchianhttps://www.blogger.com/profile/07971423154965231907noreply@blogger.com