The first thing we should be asking is why now in particular, since conditions have not really changed much in the past few months. For example, back in September, there were large uncertainties in the global economy. China’s economic slowdown was causing alarm. Volatility in international capital markets was high. The appreciation of the US dollar was hurting US exports, which could (yet) mean slower US economic growth. That was not the time for the US Federal Reserve to up interest rates. But now it is – and here’s why.
CGD Policy Blogs
Reducing inequality is front and center of the current economic policy agenda. Multilateral institutions like the IMF and the World Bank have accepted that high inequality leads to macroeconomic instability and lowers growth and that lower inequality helps make growth sustainable in the long run. But there is no magic bullet.
A note of caution to policymakers on this edition of the CGD Podcast: make sure the policies you enact to reduce inequality do not end up raising poverty. That’s what my guest Nora Lustig found in her studies of developing countries – mainly in Latin America.
This week saw the release of the World Bank’s updated global poverty counts. There is new country-level data on poverty and inequality underlying these revisions. But the big change is that the numbers are now anchored to the 2011 Purchasing Power Parity (PPP) rates for consumption from the International Comparisons Program (ICP). Previously the numbers were based on the prior ICP round for 2005.
The very first Global Goal on the new UN development agenda, formally adopted earlier this month, is to “end poverty in all its forms everywhere.” On this week’s CGD podcast, economist Montek Singh Ahluwalia, who also serves as Co-Chair of CGD’s new High Level Panel on the Future of Multilateral Development Banks (MDBs), shares his experiences of and hopes for combating poverty in India.
In 2004, Michael Clemens, Todd Moss, and I wrote a paper on the Millennium Development Goals. It made a lot of forecasts about development trends, aid flows, and political fallout from the goal-setting exercise over the next 11 years.
Last week USAID, the world’s largest aid agency, released its Vision for Ending Extreme Poverty. That’s right, USAID (an agency not usually known for its foresight and strategic acumen) has already put forth its plan on how it intends to reorient the Agency to meet the call to end extreme poverty.