Conversations on Growth, Stability and Trade

Conversations on Growth, Stability and Trade

An Historical Perspective

Brian Snowdon

This unique volume provides a comprehensive survey of the major economic issues that have helped shape the modern world. It includes discussions of the latest research findings in macroeconomics and scrutinises some of the most important debates in economic history. The author examines the many controversies relating to the role of government in a modern economy, long-run growth and development, the spread of the Industrial Revolution, the causes and consequences of the ‘Great Depression’, the ‘Great Peacetime Inflation’, the conduct of stabilisation policy, international economic integration and globalisation.

Chapter 1: Introduction: The World Economy in Historical Perspective

Brian Snowdon

Subjects: economics and finance, economic psychology, international economics

Extract

Economic ideas . . . knowledge about economics . . . have had a profound effect on the lives of billions of people, making it absolutely essential that we do our best to try and understand the scientific basis of our theories and evidence. . . . In practice, however, there are often large differences in the understanding of, or about, economic issues. The purpose of economic science is to narrow these differences by subjecting the positions and beliefs to rigorous analysis, statistical tests, and vigorous debate. (Joseph Stiglitz, 1998a) The passion (to access and influence public policy) reflects my conviction that, in a social science such as economics, those who work at the frontier of the science should also get down into the trenches of public policy in the only way they can: through advocacy . . . Ever since I turned to economics as an undergraduate in Cambridge, England, in the mid-1950s, I have felt that an academic scholar can best advance the public good by becoming a public nuisance. (Jagdish Bhagwati, 1998a) 1.1 THREE THEMES: GROWTH, STABILITY AND TRADE During the twentieth century world GDP per capita increased faster than at any other time in human history. This historically unprecedented rate of economic growth is the main reason why today the majority of people living in the developed economies enjoy such extraordinarily high living standards, as do the majority of people throughout the world, relative to their ancestors. At the time when William the Conquerer invaded England in 1066 the average person in the world could expect to live...

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