Saturday, August 30, 2014

The Growth Imperative

Laura Tyson

With inequality widening and resentment rising in rich and developing countries alike, what can governments do to nurture a large and stabilizing middle class? Are the United States and Europe facing a Japan-style lost decade of lower growth and higher unemployment? Are multinational businesses impossible to tax? Do the advocates of free trade overstate its benefits?

Everyone acknowledges that the world economy is beset with grave challenges. Many believe that today's chronic global imbalances - huge deficits in developed countries and massive surpluses in the major emerging-market economies - herald a period of epochal change. With the US facing its worst economic downturn since the Great Depression, Europe unable to resolve fundamental issues of policy and governance, and Japan mired in stagnation, the coming global shifts demand not only leaders who can transcend political self-interest, but also thinkers who are willing and able to challenge received wisdom.

Laura Tyson is one of the rare economic visionaries who can articulate the global economy's long-term priorities, while never losing sight of its short-term needs. The first female Chair of the US President's Council of Economic Advisers (under Bill Clinton), Laura Tyson regularly foresees what others miss - or dismiss. In 1992, for example, she called attention to America's declining competitiveness, which, two decades (and two financial booms) later, has emerged as the key obstacle to robust economic recovery in the US.

Every month, in The Growth Imperative, written exclusively for Project Syndicate, Laura Tyson, a professor at the Haas School of Business at the University of California, Berkeley, and former dean of the London Business School, brings to bear more than 40 years of experience as a leading US policymaker and one of the world's most astute economic observers. In this unprecedentedly precarious period for the world economy, her insights, rendered in an accessible and engaging style, have never been more valuable.

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