Jayati Ghosh on greedflation, debt, corporate taxation, and more

Jayati Ghosh argues that advanced-economy rate hikes were both unnecessary and damaging, considers how to reduce the power of agribusiness, and more. The PS Say More Newsletter | [View this message in a web browser]( [PS Say More]( This week in Say More, PS talks with Jayati Ghosh, Professor of Economics at the University of Massachusetts Amherst and a member of the Club of Rome’s Transformational Economics Commission. To read the full interview – in which Ghosh argues that advanced-economy rate hikes were both unnecessary and damaging, considers how to reduce the power of agribusiness over the global food system, condemns the Indian government’s manipulation of essential economic data, and more – [click here](. Jayati Ghosh Says More... [Michael Spence]( Syndicate: Rather than rely on the “blunt tool of interest-rate hikes,” you [argued]( last November, policymakers should have responded to the latest bout of inflation with “sensible policies such as mending broken supply chains, capping prices and profits in important sectors like food and fuel, and reining in commodity-market speculation.” Nearly a year later, rate hikes seem to have reined in inflation at relatively low cost to advanced economies. Is the bill for these countries yet to come due? What steps can developing economies – which have paid the price – take now to achieve “greater fiscal autonomy and monetary-policy freedom”? Jayati Ghosh: It is misleading to say that rate hikes have reined in inflation. Correlation does not imply causation. And, in fact, while inflation in the advanced economies has subsided, this is largely because the forces that fueled the latest bout of inflation – spikes in global food and fuel prices, as well as supply-chain disruptions – have subsided. In global commodity markets, prices peaked in mid-2022, but have since fallen, as speculative futures trading waned. Interest-rate hikes are designed to deal not with cost pressures, like those that fueled the recent bout of inflation, but with “excess demand,” by making... [Continue reading]( By the Way... PS: “India has a robust and admired statistical system,” you recently [wrote]( but Indian Prime Minister Narendra Modi’s government has been using its power to “control, manipulate, and suppress official data” to reinforce an official narrative that touts the country as the next economic superpower. Just how flawed is that narrative? JG: No country can hope to be an economic superpower if it does not first ensure that the basic needs of all its citizens are met in a sustainable manner. Here, India has failed miserably: the growth of the past two decades has been accompanied by sharply rising inequality and relatively little improvement in social indicators. While the top 10% of earners and the emerging upper-middle class have benefited from significant income growth, most of India’s enormous labor force is... [Continue reading]( [PS. Subscribe to PS Digital now.]( [Michael Spence on industrial policy, AI, growth models, and more]( [Michael Spence on industrial policy, AI, growth models, and more]( Michael Spence describes the global economy’s new supply conditions, urges governments to tap the potential of artificial intelligence to boost productivity, explains why the relationship between monetary and fiscal policy must change, and more. Spence, a Nobel laureate in economics, is Professor of Economics Emeritus and a former dean of the Graduate School of Business at Stanford University, and the author (with Gordon Brown and Mohamed A. El-Erian) of [Permacrisis: A Plan to Fix a Fractured World](. [Read now]( [PS. Explore the latest issue of our magazine, PS Quarterly: Stayin’ Alive.]( [Facebook]( [Twitter]( [LinkedIn]( Project Syndicate publishes and provides, on a not-for-profit basis, original commentary by the world's leading thinkers to more than 500 media outlets in over 150 countries. Receipt of this newsletter does not guarantee rights to re-publish any of its content. This newsletter is a service of [Project Syndicate](. [Change your newsletter preferences](. Follow us on [Facebook]( [Twitter]( and [YouTube](. © Project Syndicate, all rights reserved. [Unsubscribe from all newsletters](.