Esther Duflo: preference

Transcript context

…Why not? The power of compound returns is remarkable, right? I think one should have a healthy respect for growth rates and treat them as useful companions and people that you have to make work for you. I think we should think of growth rate as chief of staff, not something I think we should fall in love with. And I think one issue the countries have had when they’ve fallen in love with growth rates per se, as opposed to why is it you want growth in the first place, is that going back to the early conversation, it’s pretty hard to manipulate growth rates for politicians, especially in fluctuation growth rates. Therefore, if things are not going your way, and you try more and more crazy things to try to make growth come back because that’s what you’ve fallen in love with, then you can put yourself in pretty bad corners. One example is Japan. I think they did fall in love with the growth rate instead of trying to think, “Maybe there is a reason why the growth rate has fallen down. We should be comfortable with that and do the best with what we have.” Could Japan have done better? It grew very rapidly. It caught up, basically, to France, then stopped at a certain frontier short of the United States. It’s managed its decline really quite well in per capita terms. Its growth rate is okay, not spectacular. Social order is at a premium. What have they done wrong?…

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