Economics

The world’s finance ministers and central bankers will be in Washington this week for the annual meetings of the International Monetary Fund and World Bank amid growing concerns that the global economy is heading towards stagnation. Predictions of a sharp downturn fill policymakers with anxiety, knowing that job losses and lower tax revenues can only lead to social unrest. Last week the IMF’s new leader, Kristalina Georgieva, asked nations involved in tit-for-tat trade wars if they dare ignore warnings of the most serious threat to the global economy since the financial crisis. However, her agenda goes beyond the short-term difficulties posed by a downturn. Beginning her five-year tenure as managing director and chairwoman of the IMF’s executive board, she said the organisation’s long-term objectives included “dealing with issues like inequalities, climate risks and rapid technological change.” Georgieva, previously number two at the World Bank and a … [Read more...] about Georgieva’s brave new agenda at IMF threatened by economic storm clouds

The new head of the International Monetary Fund has told squabbling nations to forget their differences and prepare a united response to the most serious threat to the global economy since the financial crisis a decade ago. In her first speech since becoming the IMF’s managing director, Kristalina Georgieva said the world was in a synchronised slowdown and needed a synchronised response. Speaking ahead of the IMF’s annual meeting in Washington next week, Georgieva said her organisation’s economists were expecting slower growth in nearly 90% of the global economy this year. “While the need for international cooperation is going up, the will to engage is going down.” She said the use of low interest rates by central banks in an attempt to boost activity had led to a buildup of corporate debt and that there would be a risk of a $19tn (£15.5tn) default in the event of a major economic downturn. “The global economy is now in a synchronised … [Read more...] about Nations must unite to halt global economic slowdown, says new IMF head

Academics who have pioneered on-the-ground experiments to discover the most effective ways to tackle poverty in the developing world were awarded the Nobel prize for economics on Monday. Abhijit Banerjee and Esther Duflo of the Massachusetts Institute for Technology secured the 9m Swedish krona (£720,000) prize with Harvard professor Michael Kremer. The Swedish academy of sciences said they were awarded the Sveriges Riksbank prize in economic sciences in memory of Alfred Nobel for research findings that have “dramatically improved our ability to fight poverty in practice”. Duflo, 46, who is only the second woman to win the economics prize and the youngest, said she was surprised by the award, especially as it was usually bestowed on older academics. Asked if it was important that a woman was recognised by the academy, she said: “Showing that it is possible for a woman to succeed and be recognised for success I hope is going to inspire many, many other women to … [Read more...] about Economics Nobel prize won by academics for tackling poverty

Oligarchy rules the United States: the republic has been ransacked, its commonwealth privatised, and rentierism runs amok. The richest 10% of Americans capture an estimated 97% of all capital income – including capital gains, corporate dividends and interest payments. Since the financial crisis of 2008, almost half of all new income generated in the US has gone to the top 1%. The three wealthiest people in the US now own more wealth than the bottom 160 million Americans. And the richest family in America – the Walton family, which inherited about half of Walmart’s stock – owns more wealth than the bottom 42% of the American people. The case for bold action is clear and overwhelming. Only a deep reconstruction of economic and political rights can challenge oligarchic power and halt runaway environmental breakdown. Fortunately, Bernie Sanders has just announced a new plan that matches the scale of the crisis. His announcement on Monday of the corporate … [Read more...] about Bernie Sanders is right, it’s time to redistribute economic power

Readers of this paper on 6 June 2011 may have spotted an editorial titled “In praise of... Esther Duflo and Abhijit Banerjee”. It was indeed a paean to the two Massachusetts Institute of Technology economists and their work to lift people out of poverty. “They make a subtle case for one big argument,” we wrote. “Aid really can help poor people, provided the money follows the evidence.” Scroll forward almost a decade to this week, and the judging committee behind the “Prize in Economic Sciences in Memory of Alfred Nobel” announced that the pair would win this year’s award, alongside their colleague Michael Kremer. To the lucky trio sharing a prize of 9 million Swedish kronor (currently £716,000, although sterling’s value in these Brexit-addled times can go down as well as down), we extend our congratulations. To the judges, we say: what took you so long? A number of precedents are being broken or tested by this welcome … [Read more...] about The Guardian view on the economics Nobel: worthy winners