Centre for Development Economics
Department of Economics
Delhi School of Economics
ANNOUNCE A SEMINAR
Global Growth and Development: Why Emerging Countries Matter?
(ex-CITD, JNU, and current VC, IIFT )
May 26, Thursday at 3:05 PM IST (online)
While the great recession of the 1930’s gave us Keynesian solutions to a global crisis, the global recession in 2008 did not respond to a similar remedy despite massive “pump priming” by the US and Chinese governments and to lessen extent, other governments. At the same time empirical economists have been writing about the increasing global income inequality both between and within countries, while technical progress has shown unprecedented growth. While global growth of manufacturers stagnated since 2008, there has been some growth in the service sector particularly over the last two decades. Some empiricists have also argued that, in recent decades, no country has grown beyond the natural growth rate of population.
Economic theory (both micro and macro) has largely focused on output growth and labour productivity. There seems to be nothing which explains limits to these factors particularly given technological change. In addition neither of these seems to have any clear link to growth rate of population. In other words, except for Keynesian and monetary solutions, economic theory seems to have no answers particularly in linking any solution to the growth rate of population. In this exploratory paper we try to argue that the missing link could be importance of time on the demand side of models. This area is relatively unexplored probably due the asymmetric treatment of capital labour in general equilibrium models. It is suggested that the solution may lie in introducing time on the demand side of analytical models.