CAMBRIDGE – Manufacturing industries are no longer the labor-absorbing sectors they used to be, and that is a big problem for developed and developing economies alike. Achieving sustainable, inclusive growth will now depend on creating opportunities in services – a sector not generally associated with good, productive jobs. Conventional ...

CAMBRIDGE – While economists and policymakers have long appreciated the economic significance of knowledge, they have paid insufficient attention to the conditions that make knowledge useful. Technologies, traditions, and ideas that work well in one setting may not when they are adopted elsewhereor maintained after conditions change. ...

CAMBRIDGE – Experiments that depart from conventional economic policy can be costly. But this does not mean that there are universal rules in economics or that the prevailing view among mainstream economists should determine what policymakers do. The specter of inflation is once again stalking the world, after a long period of dormancy ...

CAMBRIDGE – The structure of great-power rivalry may exclude a world of love and harmony, but it does not necessitate a world of immutable conflict. Structure is not destiny: It does not preclude any of the myriad alternatives that lie between these extremes. US President Joe Biden's economic and foreign policies may represent a sharp ...

CAMBRIDGE – Industrialization has been essential to reducing poverty historically. But today's global and technological context implies that economic growth in developing countries is now possible only by raising productivity in smaller, informal firms that employ the bulk of the poor and lower-middle classes. Development policy has long ...

CAMBRIDGE – The G7 agreement on taxation of global corporations still needs formal approval from a wider set of countries, and there remain many details to be worked out for it to be effective. Nonetheless, it would not be farfetched to describe the deal as historic. On June 5, the world's leading economies announced an agreement that will ...

CAMBRIDGE – US President Joe Biden's administration has embarked on a bold and long-overdue departure from the economic policy orthodoxy that has prevailed in the US and much of the West since the 1980s. But those who are seeking a new economic paradigm should be careful what they wish for. Neoliberalism is dead. Or perhaps it remains very ...

CAMBRIDGE – Understanding the advantages and limitations of economists' method clarifies the value they can add to analysis of non-economic questions. Equally important, it underscores how economists' approach can complement but never replace alternative, often qualitative methods used in other scholarly disciplines. Economists have never been ...

CAMBRIDGE – Recent patterns of technological change in the rich world have made it more difficult for low-income countries to develop and converge with income levels in the developed world. These changes have contributed to deepening economic and technological dualism even within the more advanced segments of developing countries' ...

CAMBRIDGE – By promoting behavioral norms that balance market and society, "stakeholder capitalism" is supposed to enable private firms to fill the vacuum created by the decline of traditional forms of regulation by national governments. Ultimately, though, the only viable solution is to make business itself more democratic. Fifty years ...

CAMBRIDGE – Today's international trade regime was not designed for a world of data, software, and artificial intelligence. Already under severe pressure from China’s rise and the backlash against hyper-globalization, it is utterly inadequate to face the three main challenges these new technologies pose. The international trade regime we now ...

CAMBRIDGE – Policymakers and the public at large understand the importance of innovation to economic growth and well being. What is less well appreciated is the degree to which the innovation agenda has been captured by narrow groups of investors and firms whose values and interests don’t necessarily reflect society’s needs. Innovation is ...

CAMBRIDGE – Many Western economists presume that governments are not very good at identifying industries that merit support, and that domestic consumers and taxpayers incur the bulk of the costs. By the same logic, if Chinese policymakers effectively targeted activities where social benefits exceed private benefits, then it is not clear ...

CAMBRIDGE – Insofar as the world economy was already on a fragile, unsustainable path, COVID-19 clarifies the challenges we face and the decisions we must make. The fate of the world economy hinges not on what the virus does, but on how we choose to respond. The global economy will be shaped in the years ahead by three trends. The ...

CAMBRIDGE – The rise of populist movements and street protests from Chile to France has made inequality a high priority for politicians of all stripes in the world's rich democracies. But a fundamental question has received relatively little attention: What type of inequality should policymakers tackle? Inequality looms larger on ...

CAMBRIDGE – China and the United States, like all other countries, should be able to maintain their own economic model. But international trade rules should prohibit national governments from adopting "beggar-thy-neighbor" policies that provide domestic benefits only by imposing costs on trade partners. China's economic rise poses ...

CAMBRIDGE – Although most of the intellectual consensus behind neoliberalism has collapsed, the idea that emerging markets should throw their borders open to foreign financial flows is still taken for granted in policymaking circles. Until that changes, the developing world will suffer from unnecessary volatility, periodic crises, and ...

CAMBRIDGE – Most policy mishaps in the world economy today – as in the case of US President Donald Trump's tariffs – occur as a result of failures at the national level, not because of a lack of international cooperation. And, with the exception of two types of cases, countries should be allowed to make their own mistakes. US President ...

CAMBRIDGE – So-called productive dualism is driving many contemporary ills in developed and developing countries alike: rising inequality and exclusion, loss of trust in governing elites, and growing electoral support for authoritarian populists. But much of the policy discussion today focuses on solutions that miss the true source of the ...

As Suresh Naidu, Gabriel Zucman, and I explain in our "manifesto," neither sound economics nor convincing evidence support many of the dominant policy ideas of the last few decades. What has come to be called "neoliberalism" is in many ways a derogation of mainstream economics. And contemporary economic research, appropriately deployed, is in ...

CAMBRIDGE – Every economy in the world today is divided between an advanced segment, typically globally integrated, employing a minority of the labor force, and a low-productivity segment that absorbs the bulk of the workforce, often at low wages and under poor conditions. How should policymakers address this dualism? Around the world today, ...

BEIJING – The conventional wisdom among social scientists is that the demands of advanced economies and growing middle classes can be met only through greater political freedoms and competition. By doubling down on authoritarian single-party rule, China is now testing that proposition. Forty years ago this month, China's leaders set the country ...

CAMBRIDGE – The idea that public investment in infrastructure – roads, dams, power plants, and so forth – is an indispensable driver of economic growth has always held powerful sway over the minds of policymakers in poor countries. It also lay behind early development assistance programs following World War II, when the World Bank and ...

CAMBRIDGE – When Turkey's Justice and Development Party (AKP) defied pundits and pollsters by regaining a parliamentary majority in the country's general election on November 1, financial markets cheered. The next day, the Istanbul stock exchange rose by more than 5%, and the Turkish ...

CAMBRIDGE – Ever since the late nineteenth century, when economics, increasingly embracing mathematics and statistics, developed scientific pretensions, its practitioners have been accused of a variety of sins. The charges – including hubris, neglect of social goals beyond incomes, excessive attention to formal techniques, and failure to ...

PRINCETON – With global trade negotiations deadlocked for years, regional agreements – long a dormant route to trade liberalization – are back with a vengeance. The United States is at the center of two mega-deals that could shape the future path of world trade.

The Trans-Pacific Partnership (TPP) is further along, and involves 11 countries, besides the US, that collectively produce as much as 40% of global output; but China, crucially, is not among them. The Transatlantic Trade and Investment Partnership (TTIP) with the European ...

Economic policymakers seeking successful models to emulate apparently have an abundance of choices nowadays. Led by China, scores of emerging and developing countries have registered record-high growth rates over recent decades, setting precedents for others to follow. While advanced economies have performed far worse on average, there are ...

When the stakes are high, it is no surprise that battling political opponents use whatever support they can garner from economists and other researchers. That is what happened when conservative American politicians and European Union officials latched on to the work of two Harvard professors – Carmen Reinhart and Kenneth Rogoff – to justify ...

Nothing endangers globalization more than the yawning governance gap – the dangerous disparity between the national scope of political accountability and the global nature of markets for goods, capital, and many services – that has opened up in recent decades. When markets transcend national regulation, as with today’s globalization of ...