NEWS/OPINION

Zoom and Gloom

October 8, 2020

The Economist

...Recent research by Michele Coscia of the University of Copenhagen, and Frank Neffke and Ricardo Hausmann of Harvard University, finds that a permanent shutdown of international business travel would shrink global gross product by an astonishing 17% by hindering flows of knowledge across borders. The shift in favour of remote work also looks curiously like an anglosphere phenomenon; workers in mainland Europe have been swifter to return to the office than those in Britain and America.

Nonetheless, the shift will lead to significant...

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Do We Look Down on the Less Educated?

September 12, 2020

Eric Protzer - New York Times/Letters to the Editor

To the Editor:

Michael Sandel’s suspicion of meritocracy is misplaced. The working class in fact prizes success, wealth, status and fame. They want it for themselves and, more important, for their children and their children’s children.

What many members of the working class and increasingly also the middle class are furious about, and what politicians like Donald Trump have tapped into, is the broken promise of the American dream. Forty years of deeply unfair economic policy...

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After the Default: Argentina’s Unsustainable “20/80” Economy

September 10, 2020

Eduardo Levy Yeyati for Americas Quarterly

Argentina this week formally exited the ninth sovereign debt default in its history. The agreement with creditors took longer than expected, but was settled at reasonable levels, close to original projections, and just in time to avert another blow to the country’s suffering economy. Having reached a deal in the current, uncertain context and with no financial program in hand could be regarded as a success for the government.

The deal reduced Argentina’s debt payments by approximately 27% and — even more crucially...

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Planning for Crisis Resilience

September 10, 2020

Ricardo Hausmann for Project Syndicate

When you throw a tennis ball to the ground, it bounces back up. But if you throw a wine glass, it shatters. Many countries’ economies are in free fall. Will they bounce back or shatter? What can be done to assure a strong recovery?

The economic consequences of the COVID-19 pandemic may not be obvious, as ongoing research with Sebastián Bustos on previous crises suggests. In the 2008 global financial crisis, among the least affected countries...

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When should we hit the road again?

September 7, 2020

Financial Times

...That business travel was necessary for business success appeared clear before the Covid crisis. The Growth Lab, a research unit at Harvard’s Center for International Development, looked at international travel spending by holders of corporate credit and debit cards between 2011 and 2016. It found that where there was business travel, there were measurable benefits in growth and employment, both in the countries the travellers came from, but particularly in the countries they travelled to.

The transfer of knowledge was vital to business...

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Horrible trade-offs in a pandemic: Analysis and policy implications

August 29, 2020

Ricardo Hausmann and Ulrich Schetter for Vox EU

Countries all over the world are fighting COVID-19 by reducing social and economic interactions, measures that have proven effective in parts of the world but are extremely costly. We are in the midst of the deepest recession since the great depression, and World GDP is expected to fall by 4.9% in 2020, with two-digit declines in many countries (IMF 2020). A series of excellent papers suggest that the huge costs in terms of livelihoods are justified by the gains in terms of lives saved from the pandemic (e.g. Acemoglu et...

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How should world channel aid to Lebanon in wake of blast?

August 13, 2020

Ricardo Hausmann in Anadolu Agency News

How should the world channel aid to Lebanon in wake of blast? Given the huge humanitarian and economic fallout from the deadly blast, one thing is clear: Lebanon will have to get a large injection of international aid. But with its government in tatters, how, and through whom?

Speaking to Anadolu Agency, Ricardo Hausmann, founder and director of the Growth Lab at Harvard's Center for International Development, said there is no easy solution for doing this without effective government.

Harvard researchers discover a surprising reason why Zoom and Skype won’t kill business travel

August 12, 2020

Fast Company

Business travel: Turns out it does more than just fill up the front half of the airplane.

It might actually do some good for the world, says a new study out of the Harvard Kennedy School’s Growth Lab, which finds a direct link—of causation, not correlation—between a country’s incoming business travel and its economic growth. The more business travelers a country received, the better its industrial ventures fared...

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New Harvard Research Identifies Business Travel as Driver of Economic Growth

August 11, 2020

CAMBRIDGE, MA– New research from Harvard’s Growth Lab finds a direct link between a country’s incoming business travel and the growth of new and existing industries. The findings, published in the journal Nature Human Behaviour, support a Growth Lab hypothesis that moving knowhow, the tacit knowledge accumulated and transferred from brain to brain through a long process of imitation, repetition, and feedback, is critical to economic growth, and business travel plays a key part in that process. The research also raises new concerns about the economic implications of the...

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Why Zoom Can’t Save the World

August 10, 2020

Ricardo Hausmann for Project Syndicate

Before COVID-19, spending on business travel totaled $1.5 trillion a year (about 1.7% of world GDP). Now it is down to a trickle, as countries have closed their borders and social distancing has taken hold. Planes have been grounded, hotels are closed, and executives are not earning frequent flier miles. Many travel and hospitality jobs are feeling the consequences. But if this were all there was to it, the impact, however large, would probably be much smaller than the decline in general international tourism, and easily...

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