Mission: Recovery

Just as no one is safe from COVID-19 until everyone is, a healthy post-pandemic global economy is not possible without a strong rebound everywhere. But, both across and within countries, the economic recovery risks falling victim to the same short-sightedness that has hampered the global vaccine rollout.

In this Big Picture, Nobel laureate economists Michael Spence and Joseph E. Stiglitz and the University of Massachusetts Amherst’s Jayati Ghosh identify three ways in which the rich world can bolster the global recovery – including facilitating comprehensive debt restructuring for developing countries and emerging markets. Writing separately, Ghosh argues that the Big Three credit-rating agencies are preventing this from happening, and calls for the establishment of an independent public ratings agency to counterbalance them.

But advanced economies face risks, too. Former Citibank Chairman, CEO, and President William R. Rhodes and the Group of Thirty’s Stuart P.M. Mackintosh warn that scaling back monetary and fiscal stimulus measures, while necessary, could trigger a sharp equity market correction, as well as increased closures and bankruptcies of small and medium-size firms. Looking further ahead, Mohamed A. El-Erian urges US policymakers to double down on measures – such as those aimed at boosting productivity and the labor market – to deliver robust, sustainable, and inclusive long-term growth.

By contrast, Mariana Mazzucato, Laurie Macfarlane, and George Dibb of the UCL Institute for Innovation and Public Purpose argue that UK Prime Minister Boris Johnson’s recent decision to scrap the previous Conservative government’s well-crafted industrial strategy means that the country’s economic problems will most likely remain unsolved.