MACROECONOMICS AND
HUMAN DEVELOPMENT
Deepak Nayyar
15 January 2013
AGW, Bangalore
OVERVIEW
• Diminishing Intersections
• From Macroeconomics to Human Development
• From Human Development to Macroeconomics
• The Political Context
• Conclusions
I. DIMINISHING INTERSECTIONS
• Narrower concerns of macroeconomics
• Wider conception of development
• Outcome of changing concerns and shifting emphasis
• Irony in the situation
• Compared with ideas from the past
• Juxtaposed with experience from the present
II. FROM MACROECONOMICS TO
HUMAN DEVELOPMENT
• Nature of causation
• Level of employment
• Degree of social protection
• Public entitlements for social consumption
• Positive consequences
• Macroeconomic objectives and policies
• Experience from the past
• Comparison of developing countries and industrialized countries
• Negative consequences
• Orthodox macroeconomics
•
Developing countries
•
Industrialized countries
• Financial liberalization
•
Contraction in policy space
•
Social costs of volatility and crises
• Similarities between
•
Developing countries
•
Industrialized countries
III. FROM HUMAN DEVELOPMENT TO
MACROECONOMICS
• Connections, implications and consequences
• Positive causation
• Strong in developing countries
• Resource mobilization
• Resource creation
• Weak (almost absent) in industrialized countries
• Negative causation
• Capabilities without opportunities
• Reinforced by economic policies
• Manifest in ‘jobless growth’
• Common to developing countries and industrialized countries
• Feed-back effects in rich countries
• Welfare states and unsustainable macroeconomics
• Ageing of industrial societies
IV. THE POLITICAL CONTEXT
• Policies and the political process
• Economic interests
• Political compulsions
• Intersection of economics and politics in macro policies
• Fiscal policy
•
Developing countries
•
Industrialized countries
• Monetary policy
•
Developing countries
•
Industrialized countries
• Role of ideology and institutions
• Interaction of market economy and political democracy
• Twist in the tale
• Human development in the political process
• Developing countries and industrialized countries
• Rhetoric and reality
• Checks and balances
V. CONCLUSIONS
• Relationship not quite recognized
• State of economies at macro level
• Well-being of people at micro level
• Causation runs in both directions
• Positive
• Negative
• Developing countries and industrialized nations
• Similarities
• Differences
• Political economy of policy design
• Macroeconomics
• Human development