The Year in Economics, with Nouriel Roubini, Mariana Mazzucato, Jason Furman, Isabella M. Weber, and more

A look back at the issues and ideas that dominated economic debate in 2023. The Sunday Newsletter [View this message in a web browser]( [PS on Sunday]( DECEMBER 17, 2023 This week, Project Syndicate highlights commentaries that helped shape public debate about the most important economic trends and challenges of the last year. In much of the world, inflation has again been top of mind, with leading economists, from Isabella M. Weber and Joseph E. Stiglitz to Jason Furman and Kenneth Rogoff, disagreeing over both the drivers of the recent price surge and the reasons why it now appears to be easing. China’s economic troubles were another major topic of discussion. With GDP growth slowing, the property sector in turmoil, demographic headwinds gathering, and tensions with the United States running high, Yi Fuxian, Nancy Qian, and others assess whether the much-anticipated “Chinese century” will ever materialize. Meanwhile, the US-China rivalry, together with the supply-chain disruptions caused by the COVID-19 pandemic and the Ukraine war, has accelerated deglobalization, as Mohamed A. El-Erian and Paola Subacchi have discussed, raising questions, considered by Jim O’Neill and Ashoka Mody, about what the twenty-first-century economic order might look like. The last year has also brought a resurgence of industrial policy – the merits of which Mariana Mazzucato, Dani Rodrik, and others have examined – and a broader rethink of economic orthodoxy that, for James K. Galbraith, Antara Haldar, and Daron Acemoglu, was long overdue. The rapid development of artificial intelligence, Dambisa Moyo and others note, make that rethink all the more urgent. Add to this trends like mounting debt, flawed financial regulation, and climate change, and the risks to the global economy remain acute. As Nouriel Roubini, Jayati Ghosh, and others warn, a reckoning may well be on the horizon. The Inflation Debate [Taking Aim at Sellers’ Inflation]( [Isabella M. Weber]( urges policymakers to match their improved understanding of the problem with more appropriate policies. [The Anatomy of the Global Inflation Spike]( [Richard Clarida]( considers the causes and consequences of post-pandemic price surges in their global context. Big Question --------------------------------------------------------------- [Is 2% Really the Right Inflation Target for Central Banks?]( [Michael J. Boskin]( [John H. Cochrane]( [Brigitte Granville]( and [Kenneth Rogoff]( assess the usefulness of contemporary monetary policy’s lodestar. [Why Is US Inflation Falling?]( [Jason Furman]( challenges the view that recent price and employment trends defy standard economic models. [A Victory Lap for the Transitory Inflation Team]( [Joseph E. Stiglitz]( points to evidence that the pandemic-era inflation was always going to be temporary and self-correcting. Longer Reads --------------------------------------------------------------- [The World Needs a Humble Approach to Central Banking]( [Jacob Frenkel]( [Raghuram G. Rajan]( and [Axel A. Weber]( explain why monetary policymakers must accept a deliberately narrow mandate. [Higher Interest Rates Are Here to Stay]( [Kenneth Rogoff]( thinks that policymakers and economists must reassess their beliefs in light of current market realities. [The New Normal for Central Banks]( [Lucrezia Reichlin]( asks why the US Federal Reserve and the European Central Bank keep providing liquidity directly to banks. China's Economic Slowdown [China Is Dying Out]( [Yi Fuxian]( foresees a humanitarian crisis by mid-century, owing to low fertility and rapid population aging. [Is Chinese Youth Unemployment As Bad As It Looks?]( [Nancy Qian]( argues that the rise in joblessness among young people does not spell economic apocalypse for China. Big Picture --------------------------------------------------------------- [How Bad Is China’s Economy?]( [Angela Huyue Zhang]( [Yu Yongding]( and more examine whether all the recent doomsaying is warranted. [US-China Decoupling by the Numbers]( [Stephen S. Roach]( warns that targeted bilateral actions will not resolve, and could worsen, America’s outsize trade deficit. [Why Hasn’t China Rushed to Bail Out Its Economy?]( [Zhang Jun]( explains why the country has abandoned its aggressive macroeconomic strategy in favor of de-risking. A New Global Economic Order? [Fragmented Globalization]( [Mohamed A. El-Erian]( sees in the recent retrenchment of trade a profound shift rather than an end to cross-border flows. [The Great Global Crack-Up]( [Paola Subacchi]( examines the risks generated by the geopolitics-fueled backlash against economic globalization. Say More --------------------------------------------------------------- [Pinelopi Koujianou Goldberg on inflation targets, deglobalization, US-China tensions, and more]( [Pinelopi Koujianou Goldberg]( proposes politically feasible supply-side policies for tackling inflation, questions America’s approach to industrial policy, illuminates the complex relationship between trade and inequality, and more. [A BRICS Threat to the Dollar?]( [Jim O’Neill]( thinks renewed speculation about alternative currency arrangements is generally misplaced. [Unlike China, India Cannot Be an Economic Superpower]( [Ashoka Mody]( explains why the hype around the country’s neoliberal policies and growth prospects is misguided. The Return of Industrial Policy [Economists Reconsider Industrial Policy]( [Dani Rodrik]( [Réka Juhász]( and [Nathan Lane]( review key findings of a new generation of research that overturns much of the conventional wisdom. [Rethinking Growth and Revisiting the Entrepreneurial State]( [Mariana Mazzucato]( urges governments to focus more on the direction and nature of economic development, rather than just its pace. Say 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. [The False Choice Between Neoliberalism and Interventionism]( [Yuen Yuen Ang]( calls on policymakers to think more creatively about how to accelerate economic development. [America’s New Era of Industrial Policy]( [Laura Tyson]( and [Lenny Mendonca]( assess the scope and design of the Biden administration’s big push into supply-side investment. Rethinking Economic Orthodoxy [Why Mainstream Economics Got Inflation Wrong]( [James K. Galbraith]( thinks the misdiagnosis of price growth in 2021-22 speaks to a larger problem with the discipline. Say More --------------------------------------------------------------- [Antara Haldar on behavioral economics, development models, global governance, and more]( [Antara Haldar]( advocates a radical rethink of development, explains what went right at the recent AI Safety Summit, highlights the economics discipline’s shortcomings, and more. [In Search of a New Political Economy]( [Daron Acemoglu]( identifies five questions that must be addressed to bring policymaking into the twenty-first century. The Rise of Artificial Intelligence [An Economic Model for the AI Age]( [Dambisa Moyo]( considers what the artificial-intelligence revolution will demand of governments and companies. Longer Reads --------------------------------------------------------------- [Whose AI Revolution?]( [Anu Bradford]( refutes the argument that democratic governments cannot regulate artificial intelligence effectively. [Preempting a Generative AI Monopoly]( [Diane Coyle]( urges policymakers to take steps to counter the anti-competitive implications of a rapidly emerging market. A Risky Outlook [How Finance Became the Problem]( [Katharina Pistor]( catalogues the high costs of transforming almost every political challenge into a priceable asset. [The Global Recovery Is Faltering]( [Eswar Prasad]( warns that economic activity is weakening across the board, even as the specter of high inflation recedes. Longer Reads --------------------------------------------------------------- [Our Megathreatened Age]( [Nouriel Roubini]( predicts a bright future – if we can survive the next few decades of economic instability and political chaos. [Developing Countries’ Never-Ending Debt Crisis]( [Barry Eichengreen]( worries that creditors, especially major sovereigns like China, are losing their grip on the problem. [Schizophrenia at the IMF]( [Jayati Ghosh]( warns that the Fund’s insistence on fiscal retrenchment for developing countries ignores its own research. [PS Holiday Sale: Save $50 on all new subscriptions.]( 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. This newsletter is a service of [project-syndicate.org](. © Project Syndicate, all rights reserved. [Unsubscribe from this list](