Abhijit Banerjee: prediction

Transcript context

…How well do you think economists understand economic growth more generally? I think they don’t understand it. This is the point we make in the book. I think we understand some very basic insights, one being the one that my colleague, Bob Solow, made very clear, which is that growth has a tendency to run out, that once you used up your best talent and your best capital and your best locations, there’s going to be less and less so. And I think that’s probably the only thing which has been pretty consistently borne out: that fast growth slows down. China’s slowing now. And there’s nothing tragic about it. It’s a normal way of things. I think that the question is more — the thing that we don’t understand is what makes that happen sooner or later, more or less, et cetera. Brazil grew for 20 years, extremely fast, between 1960 and 1980, and then essentially stopped for 20 years. Why do those kinds of things happen? That we don’t understand. I think we’re lousy at predicting growth in general. But if we have countries — take Singapore as an example. Say they invest heavily in human capital, they actually have the political will to grow, and they very broadly have some kind of neoliberal policies, but tailored to their specifics. Don’t we know if they do that, they’ll grow? Singapore it worked, Dubai it worked, Republic of Ireland it worked. Don’t we know a lot about growth?…

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