Perhaps the hardest challenge has been to persuade the public, impatient for rapid growth, of the need to ensure stability first. Growth, it is argued, is always more important, regardless of the looming economic risks.
Interpretation
The quote emphasizes the importance of stability over rapid growth in the face of potential economic risks.
Raghuram Rajan expresses a critical perspective on the common belief that growth should be prioritized above all else. He argues that convincing the public to value stability, especially in uncertain economic times, is a significant challenge. The quote underscores the tension between the desire for immediate growth and the necessity of ensuring a stable foundation, which can prevent larger economic problems in the future.
In practice
During an economic policy discussion, one might quote this to advocate for prioritizing stability over immediate growth.
The U.S. should worry about the effects of its polices on the rest of the world. We would like to live in a world where countries take into account the effect of their policies on other countries and do what is right, broadly, rather than what is just right given the circumstances of that country.
Customers often value a good more when its price goes up. One reason may be its signaling value. An expensive handcrafted mechanical watch may tell time no more accurately than a cheap quartz model; but, because few people can afford one, buying it signals that the owner is rich.
The problem with forbearance is that it always looks like a good thing to do until it stops working.
Too many years away from academia renders you pretty incompetent at research and teaching. So I had to go back.
The gap in India has always been between the promise and the execution.
Democratic accountability means that governments must be popularly accepted, with citizens empowered to replace corrupt or incompetent rulers.
An overwhelming number of economists, international civil servants, and policy-makers argue that a fragmentation of the Eurozone would cause a new depression and massive wealth destruction around the world. It would also end the period of economic integration that has characterized world politics since the end of the Cold War.
We ask our companies to restructure; we ask employees to work more for less money because there is overproduction, but then we're unable to defend them from cheaper Chinese imports. We are insane.
How can government reduce the frequency and the severity of future catastrophes? Companies that have the potential to create significant harm must be required to pay for the costs they inflict, either before or after the fact. Economists agree on this general approach. The problem is in putting such a policy into effect.
THE CORRECTION, when it finally came, was not an overnight bursting of a bubble but a much more gentle letdown, a year-long leakage of value from key financial markets, a contraction too gradual to generate headlines and too predictable to seriously hurt anybody but fools and the working poor.
The real and effectual discipline which is exercised over a workman is that of his customers. It is the fear of losing their employment which restrains his frauds and corrects his negligence.
America's role in the global economy inevitably was going to diminish; we're smaller relative to - as China, India, other emerging markets grow.
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