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How to Restore Equitable and Sustainable Economic Growth in the United States

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  • Joseph E. Stiglitz

Abstract

Today's weakness in the US economy results from lack of aggregate demand, due to high and growing inequality, underinvestment in public infrastructure and technology that is complementary to private capital, continuing mild austerity, difficulties encountered in making the structural transformation from manufacturing to a service-based economy, and a financial sector failing to provide adequate funds to SMEs. An agenda to restore growth includes a carbon price, inducing climate investments; increased public investments in infrastructure and technology; fighting inequality through redistribution and rewriting the rules structuring the economy; and reforming the financial sector and the global reserve system.

Suggested Citation

  • Joseph E. Stiglitz, 2016. "How to Restore Equitable and Sustainable Economic Growth in the United States," American Economic Review, American Economic Association, vol. 106(5), pages 43-47, May.
    • Handle: RePEc:aea:aecrev:v:106:y:2016:i:5:p:43-47
    Note: DOI: 10.1257/aer.p20161006
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    References listed on IDEAS

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    1. Thomas Herndon & Michael Ash & Robert Pollin, 2014. "Does high public debt consistently stifle economic growth? A critique of Reinhart and Rogoff," Cambridge Journal of Economics, Cambridge Political Economy Society, vol. 38(2), pages 257-279.
    2. Gatti, Domenico Delli & Gallegati, Mauro & Greenwald, Bruce C. & Russo, Alberto & Stiglitz, Joseph E., 2012. "Mobility constraints, productivity trends, and extended crises," Journal of Economic Behavior & Organization, Elsevier, vol. 83(3), pages 375-393.
    3. Griffith-Jones, Stephany & Ocampo, Jose Antonio & Stiglitz, Joseph E. (ed.), 2010. "Time for a Visible Hand: Lessons from the 2008 World Financial Crisis," OUP Catalogue, Oxford University Press, number 9780199578818.
    4. Alberto Alesina & Silvia Ardagna, 2010. "Large Changes in Fiscal Policy: Taxes versus Spending," NBER Chapters, in: Tax Policy and the Economy, Volume 24, pages 35-68, National Bureau of Economic Research, Inc.
    5. Arjun Jayadev & Mike Konczal, 2010. "When Is Austerity Right?: In Boom, Not Bust," Challenge, Taylor & Francis Journals, vol. 53(6), pages 37-53.
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    Citations

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    Cited by:

    1. Nichola Lowe & Maryann P. Feldman, 2018. "Breaking the Waves: Innovating at the Intersections of Economic Development," Economic Development Quarterly, , vol. 32(3), pages 183-194, August.
    2. Piotr Rubaj, 2022. "International Trade as a Key Factor for Sustainable Economic Development," European Research Studies Journal, European Research Studies Journal, vol. 0(4), pages 195-206.
    3. Dufrénot, Gilles & Rhouzlane, Meryem & Vaccaro-Grange, Etienne, 2022. "Potential growth and natural yield curve in Japan," Journal of International Money and Finance, Elsevier, vol. 124(C).
    4. Schwerhoff, Gregor & Nguyen, Thang Dao & Edenhofer, Ottmar & Grimalda, Gianluca & Jakob, Michael & Klenert, David & Siegmeier, Jan, 2017. "Policy options for a socially balanced climate policy," Economics - The Open-Access, Open-Assessment E-Journal (2007-2020), Kiel Institute for the World Economy (IfW Kiel), vol. 11, pages 1-11.
    5. Roller, Slavek, 2021. "Institutional investors’ sustainability policies and the outcomes for the healthcare sector portfolios," Health Policy, Elsevier, vol. 125(10), pages 1367-1376.
    6. Roy van der Weide & Ambar Narayan, 2019. "China and the United States: Different economic models but similarly low levels of socioeconomic mobility," WIDER Working Paper Series wp-2019-121, World Institute for Development Economic Research (UNU-WIDER).
    7. Shahzad Ijaz & Arshad Hassan & Amine Tarazi & Ahmad Fraz, 2020. "Linking Bank Competition, Financial Stability, And Economic Growth," Post-Print hal-02475572, HAL.
    8. Nkrumah, Kwabena Meneabe, 2020. "Fiscal Policy Innovations in Advanced Economies," MPRA Paper 98740, University Library of Munich, Germany.
    9. Mattauch, Linus & Klenert, David & Stiglitz, Joseph E. & Edenhofer, Ottmar, 2017. "Piketty meets Pasinetti: On public investment and intelligent machinery," VfS Annual Conference 2017 (Vienna): Alternative Structures for Money and Banking 168156, Verein für Socialpolitik / German Economic Association.
    10. Bodo Herzog, 2019. "Dynamic Expectation Theory: Insights for Market Participants," JRFM, MDPI, vol. 12(2), pages 1-14, May.
    11. Mattauch, Linus & Klenert, David & Stiglitz, Joseph E. & Edenhofer, Ottmar, 2022. "Overcoming wealth inequality by capital taxes that finance public investment," Structural Change and Economic Dynamics, Elsevier, vol. 63(C), pages 383-395.
    12. Antonino Callea & Dalila De Rosa & Giovanni Ferri & Francesca Lipari & Marco Costanzi, 2022. "Can Emotional Intelligence promote Individual Wellbeing and protect from perceptions' traps?," CERBE Working Papers wpC39, CERBE Center for Relationship Banking and Economics.
    13. Nkrumah, Kwabena Meneabe, 2018. "Essays In Fiscal Policy And State Dependence Fiscal Policy Innovations Using A New Econometric Approach," MPRA Paper 98689, University Library of Munich, Germany.
    14. Stiglitz, J.E., 2016. "An agenda for sustainable and inclusive growth for emerging markets," Journal of Policy Modeling, Elsevier, vol. 38(4), pages 693-710.
    15. John Komlos, 2016. "Unemployment in a Just Economy," CESifo Working Paper Series 5974, CESifo.
    16. Milan Zafirovski, 2024. "Distributive justice revisited in a comparative setting: the fairness of wages in OECD countries and modalities of society," SN Business & Economics, Springer, vol. 4(1), pages 1-44, January.
    17. Khan, Haider, 2023. "Can BRI be the Road to Peace and Prosperity?," MPRA Paper 117081, University Library of Munich, Germany.
    18. Marques, André M., 2022. "Is income inequality good or bad for growth? Further empirical evidence using data for all Brazilian cities," Structural Change and Economic Dynamics, Elsevier, vol. 62(C), pages 360-376.
    19. Siegmeier, Jan & Mattauch, Linus & Edenhofer, Ottmar, 2018. "Capital beats coal: How collecting the climate rent increases aggregate investment," Journal of Environmental Economics and Management, Elsevier, vol. 88(C), pages 366-378.

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    More about this item

    JEL classification:

    • E23 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Production
    • E32 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles - - - Business Fluctuations; Cycles
    • E44 - Macroeconomics and Monetary Economics - - Money and Interest Rates - - - Financial Markets and the Macroeconomy
    • E61 - Macroeconomics and Monetary Economics - - Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook - - - Policy Objectives; Policy Designs and Consistency; Policy Coordination
    • E62 - Macroeconomics and Monetary Economics - - Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook - - - Fiscal Policy; Modern Monetary Theory
    • H50 - Public Economics - - National Government Expenditures and Related Policies - - - General

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