Opinion

Opponents of more IMF lending may have blood on their hands

June 18, 2020

Ricardo Hausmann for the Financial Times

Time is at a premium in a pandemic. China’s slow response to the coronavirus in December and January cost the world dearly. So did the slow response in Europe and the US in February and March. But the world may not have learnt the lesson: the mistake appears to be happening once again, this time at the IMF.  By historical standards, the IMF has responded quickly and massively. In early April, it announced during its spring meetings that a major economic downturn was coming. It hurriedly revamped its rapid financing...

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What Should We Be Preparing For?

May 27, 2020

Ricardo Hausmann for Project Syndicate

Suppose you knew that a hurricane was coming, but meteorologists were uncertain if it would make landfall as a Category 2 or a Category 5 storm. Which scenario should you prepare for?

The problem you face reflects the costs of assuming that it is a Category 5 when it is only a Category 2 and vice versa. The latter scenario implies deaths and destruction that could have been avoided through evacuations, well-supplied shelters, and precautionary shutdowns. The first scenario implies unnecessary preventive costs. In the...

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Target R and Wait for the Vaccine

April 23, 2020

Ricardo Hausmann for Project Syndicate

Opening up the economy means allowing more human interaction and hence greater potential for new #COVID19 infections. Two numbers matter for deciding whether this can be done safely any time soon.

Coronavirus will be an even deadlier pandemic in developing countries

March 27, 2020

Ricardo Hausmann in Miami Herald

While we are all watching the news about the explosion of COVID-19 cases in the United States, Spain and Italy, we will soon face a bigger problem.

After talking with almost a dozen experts from some of the world’s leading universities, I’m much more worried about what might soon happen in Africa, Latin America and the Caribbean than about the latest U.S. or European pandemic statistics.

...

Harvard University professor Ricardo Hausmann, an expert in global development issues, told me that the United...

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Latin America, With Few Bullets to Spare

March 18, 2020

Eduardo Levy Yeyati - Americas Quarterly

At a moment when advanced economies are debating whether to fund ambitious fiscal packages with zero-interest rate Treasury debt or central bank (“helicopter”) money, we in Latin America feel like the heroes in John Ford´s classic 1930s Western film Stagecoach: Surrounded by enemies, and with precious few fiscal bullets to spare.

Indeed, emerging economies have suffered the double shock of a flight-to-quality increase in financial costs and a commodity price decline that narrows the room for fiscal policy to respond...

Flattening the COVID-19 Curve in Developing Countries

March 24, 2020

Ricardo Hausmann - Project Syndicate

COVID-19 is ravaging advanced economies such as Italy, France, Spain, and the United States. Beyond the deaths and human suffering, markets are discounting a catastrophic recession accompanied by massive defaults, as expressed in the radical repricing of corporate credit risk by financial markets.

Does Anyone Really Know What Socialism Is?

March 4, 2020

Ricardo Hausmann - Freakonomics

Trump says it would destroy us. Sanders says it will save us. The majority of millennials would like it to replace capitalism. But what is “it”? We bring in the economists to sort things out and tell us what the U.S. can learn from the good (and bad) experiences of other (supposedly) socialist countries.

Europe’s Green Future Starts in Ethiopia

February 4, 2020

Ricardo Hausmann - Project Syndicate

The European Union's ambitious new Green Deal promises to make the bloc carbon-neutral by 2050, while creating new jobs and raising living standards. But, given that Europe accounts for only 10% of global carbon emissions, the true test of its green agenda lies in its willingness to help others with their own sustainable development.

People Value a Fair Opportunity over Equality

October 24, 2019

Eric Protzer, Paul Summerville - letter to Financial Times

Benedict Mander’s report “Chile’s inequality ignites unrest” (October 22) effectively articulates some of the frustrations behind the protests in Santiago: growth that is not inclusive, and a sense of being left behind. But like so much commentary on contemporary political unrest, it then makes the leap of assuming this anger can be chalked up simply to inequality of income and wealth.

This is a common mistake. In fact, behavioural science shows that people do not systematically dislike unequal...

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The Cure for Populism Is Equal Opportunity

October 25, 2019

Eric Protzer, Paul Summerville - Foreign Policy

he People’s Party of Canada (PPC), a cousin of the populist movements springing up in many advanced democracies, got badly trounced in the recent federal election. Maxime Bernier, the self-styled populist leader and founder of the PPC, even lost his seat in Beauce, Quebec, in the process. The PPC polled less than 2 percent of the popular vote, finished sixth among national political parties, and is now expected to close shop.

The PPC’s stark failure stands in contrast to populist success in other Western...

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Don’t Blame Economics, Blame Public Policy

September 1, 2019

Ricardo Hausmann - Project Syndicate

It is now customary to blame economics or economists for many of the world’s ills. Critics hold economic theories responsible for rising inequality, a dearth of good jobs, financial fragility, and low growth, among other things. But although criticism may spur economists to greater efforts, the concentrated onslaught against the profession has unintentionally diverted attention from a discipline that should shoulder more of the blame: public policy.

Economics and public policy are closely related, but they are not the...

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Indonesia and the Quest for 7% Growth: Overpromise or Underperformance?

April 16, 2019

By Timothy Cheston 
Visualizations by: Nil Tuzcu

Indonesians head to the polls for presidential and legislative elections on April 17, in what is traditionally billed as a clash of titans in the world’s third largest democracy. This time around, voters will find familiar names on the presidential ballot, as Joko Widodo, or Jokowi, faces Prabowo Subianto in the same billing as the 2014 election, with the one exception of Jokowi now having the incumbency of the presidency behind him. If current polls hold, the election appears less of a rematch than a watered-...

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Nicolás Maduro will not reverse Venezuela’s economic collapse

August 23, 2018

Ricardo Hausmann - Financial Times

When presenting his economic stabilisation plan on August 17, Venezuelan president Nicolás Maduro proudly argued that no government has ever done it this way. He should have wondered why. Venezuela is undergoing an economic collapse without precedent outside of war or the fall of the Soviet Union.

This is accompanied by hyper-inflation. Annual inflation is running at over 80,000 per cent and the IMF has predicted it will hit 1m per cent this year. The price of the dollar has added three zeroes in 15 months.

How Not to Fight Income Inequality

November 14, 2018

Ricardo Hausmann - Project Syndicate

Trying to combat income inequality through mandated wage compression is not just an odd preference. It is a mistake, as Mexico's president-elect, Andrés Manuel López Obrador, will find out in a few years, after much damage has been done.

Suppose two people hold different opinions about a policy issue. Is it possible to say that one is right and the other wrong, or do they just...

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