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Wednesday, June 22, 2011

Rethinking Economics

The Finance & Development of the IMF published an exclusive interview (Rethinking Economics in a Changed World) of three Nobel Laureates, Robert Solow, Joseph Sitglitz and Michael Spence, primarily on the change in policy economics after the crisis.  

I took some sentences from their interviews to note, which could also be applied in the context of Bangladesh.

Stiglitz on lessons learned from the crisis: “Another widespread belief was that keeping inflation low and stable was necessary, and almost sufficient, for maintaining high growth and good economic performance. Clearly, that is wrong as well.”

Spence on the renewed role of the central bank: “My takeaway of the general discussion is that inflation continues to be an important policy target, but it can’t be the exclusive focus of central banks.”

Solow on the renewed role of the central bank: "An interesting idea with direct policy implications is to rethink the way the credit mechanism mediates between savers and investors and puts credit to productive use."

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