Our guest for this episode of FED Dialogues is one of the strongest proponents of countries striving for GDP growth as a means of improving human lives at scale. American economist Lant Pritchett's arguments for growing the size of the pie are incisive and empirically driven, based on his work at the World Bank. He's done a lot of work in keeping alive the attention on the importance of growth by adding to the scholarship on how it is the strongest determinant for human development outcomes such as reducing child mortality or enhancing the standard of living of oppressed communities such as Dalits in India.
He also has a lot to say about 'income inequality', stuff that he admits may get him in trouble, but he says it anyway. So we hear his take on why the West may 'want' to believe that people in the Global South don't care about economic growth as much as they do about equity, and why fear-mongering about the 'rich getting richer' may actually be quite misleading when viewed in context of the immense benefits that economic growth brings for everyone, including those at the bottom of the pyramid!
Watch the full video.
Episode Chapters
(00:00) Episode Highlights
(03:13) Lant's personal connect to economic growth
(04:55) GDP as a determinant of human development
(09:30) Growth and income inequality
(10:25) Are the poor really getting poorer?
(21:35) Do poor countries care more for equity than growth?
(34:15) Enabling economic growth vs targeted charity work
(36:46) Sustained economic growth - incredibly rare and easily reversed
(39:52) "Only 13 countries..."
(50:26) Why exports matter
(53:56) On exports, India is different than most other countries
(56:51) When should government listen to the industry?
(1:00:00) Exporters are 'magicians'
(1:12:30) Migration for economic growth
Show notes
(05:18) - Paper on importance of GDP for reducing child mortality https://documents1.worldbank.org/cura...
(11:36) Chile's growth incidence curve https://www.worldbank.org/en/topic/po...
(13:25) Dalits in Uttar Pradesh in the market reform era https://casi.sas.upenn.edu/sites/defa...
(14:12) Factfulness by Hans Rosling https://www.amazon.in/dp/1473637465?r...
(22:03) Graph by Visual Capitalist titled "What If Everyone Lived Like These Countries?" https://www.visualcapitalist.com/the-...
(22:58) Malthusian curve: Population grows exponentially and food resources linearly https://www.researchgate.net/figure/M...
(27:38) Envelopment graphs https://lantpritchett.org/economic-gr...
(30:20) "Growth is not enough" https://www.project-syndicate.org/onp...
(34:20) Development work vs charity work https://lantpritchett.org/development...
(40:05) Success stories of sustained high growth https://openknowledge.worldbank.org/s...
(1:00:00) Types of market participants framework - rentiers, powerbrokers, workhorses and magicians https://papers.ssrn.com/sol3/papers.c...
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