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Growth after the Crisis

Author

Listed:
  • Dani Rodrik

Abstract

How hospitable will the global environment be for economic growth in the developing world as we come out of the present financial crisis? The answer depends on how well the author manage the following tension. On the one hand, global macro stability requires that we prevent external imbalances from getting too large. On the other hand, growth in poor nations requires that the world economy be able to absorb a rapid increase in the supply of tradable produced in the developing world. It is possible to render these two requirements compatible, but doing so requires greater use of explicit industrial policies in developing countries, which have the potential of encouraging of modern tradable activities without spilling over into trade surpluses. The 'price' to be paid for greater discipline on real exchange rates and external imbalances is greater use (and permissiveness) towards industrial polices.

Suggested Citation

  • Dani Rodrik, 2009. "Growth after the Crisis," World Bank Publications - Books, The World Bank Group, number 27937, December.
    • Handle: RePEc:wbk:wbpubs:27937
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    References listed on IDEAS

    as
    1. Eswar S. Prasad & Raghuram G. Rajan & Arvind Subramanian, 2007. "Foreign Capital and Economic Growth," Brookings Papers on Economic Activity, Economic Studies Program, The Brookings Institution, vol. 38(1), pages 153-230.
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    More about this item

    Keywords

    Macroeconomics and Economic Growth - Economic Theory & Research Poverty Reduction - Achieving Shared Growth International Economics and Trade - Globalization and Financial Integration International Economics and Trade - Trade Finance and Investment Macroeconomics and Economic Growth - Economic Conditions and Volatility;

    JEL classification:

    • F43 - International Economics - - Macroeconomic Aspects of International Trade and Finance - - - Economic Growth of Open Economies
    • O11 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Macroeconomic Analyses of Economic Development

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