The aim of this blog is to help readers understand what is happening in the economy, why it is happening, and what might be done about it.
The US economy has gone through a series of crises in recent decades. The collapse in 2008 was the sharpest downturn since the Great Depression – until the collapse in 2020. Hasty and desperate lockdowns were required to address the spread of Covid, following months of then President Trump asserting “we have it totally under control” (in January), and “One day – it’s like a miracle – it will disappear” (in February). It could have been handled far better.
Ignoring the problem did not mean it would go away. It did not. And while the economy eventually recovered from the Covid pandemic (spurred by critical support from a series of relief packages), there will always be new challenges. There are also long-standing issues, including the need to address the causes of climate change, stagnant wages and associated income inequality, soaring health care costs, a slow pace of productivity growth, and more. But despite the importance of these and other economic challenges, the public discourse has been particularly disappointing and disturbing.
This blog will seek to contribute to an understanding of these challenges and how they might be addressed. As one can perhaps tell from the above, my bias is from what is now considered a liberal perspective. There are solutions, but there is a need to understand first the facts and second the causes. Sometimes the solutions are not implemented due to a failure of imagination. But probably more often they are not implemented due to vested interests, where the reform needed, while good for most of us, will be costly for those who benefit from a dysfunctional system. It is hoped that this blog will contribute to an understanding of where this is.
In 2010 I retired from a career spent mostly in the World Bank Group. My last position was as Chief Economist and Director of the Economics and Policy Group of the Multilateral Investment Guarantee Agency (MIGA). MIGA is a separate agency within the World Bank Group that provides political risk insurance for private investments in member countries. My group was responsible for assessing the risks of such guarantees, including the environmental and social risks in addition to the risk to MIGA. Prior to that, I was in the Chief Economist’s Office of the International Finance Corporation (IFC), the agency within the World Bank Group that provides loans and equity investments to private firms in member countries. And prior to IFC, I was in the World Bank proper, in a series of positions working with countries in Latin America, Central Europe, and East Asia.
Prior to joining the World Bank, I taught in the Department of Political Economy at Johns Hopkins University. I have a Ph.D. In Economics from Stanford, studied for two terms at Cambridge University (on Keynes, with his student Lord Richard Kahn as my tutor), and have a Bachelor of Arts in Economics from Princeton.
Frank J. Lysy
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