Myron Scholes Global Markets Forum
September 26, 2008
The Growth Commission Report: Strategies for Sustained Growth and Inclusive Development
The BREAD conference brings together many of the world’s leading researchers on economic development. The IGM hosted this conference in September 2008, and while these experts were in Chicago, we pulled together three of them for a public discussion of what researchers have learned about economic growth and how governments can take advantage of these lessons. Danny Leipziger, vice president for poverty reduction and economic management at the World Bank, gave an overview of the Growth Commission Report, written by high-level policy makers in concert with academic researchers. He noted that the report “reaffirms the centrality of growth as the main driver for welfare improvements,” and it highlights the advantages of international markets for poor countries.
Abhijit Banerjee, Ford Foundation Professor of International Economics at MIT, and head of MIT’s Poverty Action Lab, liked the report largely because of what it did not say. It could have listed a bunch of policies that promote free markets and stable economies, and said “let her rip,” he argued, but instead it listed many roles for active governments. Raghuram Rajan also agreed with much of the report, but pointed out that clear economic frameworks are often needed as complements to pragmatic policies. All three panelists agreed that growth should be “inclusive,” not just to spread the benefits to the poor, but also to maintain political support for high-growth policies.
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Danny M. Leipziger is Vice President for Poverty Reduction and Economic Management (PREM) and Head of the PREM Network of more than 700 economists and other professionals working on economic policy, lending, and analytic work for the World Bank's client countries. In this capacity he provides strategic leadership and direction to Regional PREM units as well as groups working on economic policy formulation in the area of growth and poverty, debt, trade, gender, and public sector management and governance. He is heavily involved in positioning the Bank on major economic policy issues and in managing the Bank's overall interactions on these issues with key partner institutions - including the IMF, OECD, regional development banks and the European Union. He works closely with Regional Vice Presidents on leading edge and cross-country economic matters.
Leipziger, a PhD in economics from Brown University, has written extensively on development economics and finance, and has lectured widely on industrial policy, financial crisis management, and development experience. He has authored several books on Korea and East Asia, including Lessons from East Asia (University of Michigan, 1997), Preventing Banking Crises (1998), Korea: Transition to Maturity (1988), and Chile: Policy Lessons (1999). He has published more than 30 articles in economic journals and spoken often to various audiences on development policy and global economic issues. Recent published work has dealt with Privatization of Infrastructure Services, Moral Hazard Behavior in International Lending, and the Role of Infrastructure in Achieving the MDGs.
Abhijit Banerjeeis the Ford Foundation Professor of Economics in the Department of Economics at Massachusetts Institute of Technology, the Director of the Poverty Action Lab and the past President of the Bureau for Research in Economic Analysis and Development (BREAD). He received his PhD in economics from Harvard University in 1988, and has taught at Princeton and Harvard before joining the MIT faculty in 1996. In 2001, he was the recipient of the Malcolm Adeshesiah Award, and was awarded the Mahalanobis Memorial Medal in 2000. He is a fellow of the Econometric Society and the American Academy of Arts and Sciences, and has been a Guggenheim Fellow and Alfred P. Sloan Research Fellow. His areas of research are development economics, the economics of financial markets and the macroeconomics of developing countries.
Raghuram G. Rajan served as Chief Economist at the International Monetary Fund between 2003 and 2006. His major research focus is on economic growth, and the role finance plays in it. Rajan believes there is no issue with greater urgency or moral imperative than economic development. As for his students, he hopes they walk away with "a greater awareness of the world they live in. And in a small way," he says, "I want to help them reflect on how they can make it better."
He has been a visiting professor at the Kellogg School of Management at Northwestern University, the Massachusetts Institute of Technology Economics Department and Sloan School of Management, as well as the Stockholm School of Economics. He also has worked as a consultant for the Indian Finance Ministry, World Bank, Federal Reserve Board, Swedish Parliamentary Commission, and various financial institutions. His practical experience gives him a better understanding of what is economically important and what is not.
Rajan is the author, along with fellow Chicago Booth faculty member Luigi Zingales, of the book, Saving Capitalism from the Capitalists. Reearch papers he has authored include: "Foreign Capital and Economic Growth" published in 2006 in the Proceedings of the Jackson Hole Conference organized by the Kansas City Fed; "Does Aid Affect Governance?" written with Arvind Subramanian that will appear in the American Economic Review; "Modernizing China's Growth Paradigm" written with Eswar Prasad and published in May 2006 in the American Economic Review; "Entry Regulation as a Barrier to Entrepreneurship" written with Leora Klapper and Luc Laeven and published in 2006 in the Journal of Financial Economics.
Rajan's work has earned him a number of awards. He received the inaugural Fischer Black Prize in 2003, which is awarded by the American Finance Association for the person under 40 who has contributed the most to the theory and practice of finance.
This event is part of the Initiative on Global Markets and is generously sponsored by Myron Scholes.
The Initiative also receives financial support from the Chicago Mercantile Exchange (CME) Group Foundation and our corporate partners: AQR Capital Management, Barclays Bank PLC, John Deere, and Northern Trust Corporation.