MACROECONOMICS AND HUMAN DEVELOPMENT

1. MACROECONOMICS AND HUMAN DEVELOPMENT Deepak Nayyar 15 January 2013 AGW, Bangalore

2. OVERVIEW • Diminishing Intersections • From Macroeconomics to Human Development • From Human Development to Macroeconomics • The Political Context • Conclusions

3. I. DIMINISHING INTERSECTIONS • Narrower concerns of macroeconomics • Wider conception of development • Outcome of changing concerns and shifting emphasis • Irony in the situation • Compared with ideas from the past • Juxtaposed with experience from the present

4. II. FROM MACROECONOMICS TO HUMAN DEVELOPMENT • Nature of causation • Level of employment • Degree of social protection • Public entitlements for social consumption • Positive consequences • Macroeconomic objectives and policies • Experience from the past • Comparison of developing countries and industrialized countries • Negative consequences • Orthodox macroeconomics • Developing countries • Industrialized countries • Financial liberalization • Contraction in policy space • Social costs of volatility and crises • Similarities between • Developing countries • Industrialized countries

5. III. FROM HUMAN DEVELOPMENT TO MACROECONOMICS • Connections, implications and consequences • Positive causation • Strong in developing countries • Resource mobilization • Resource creation • Weak (almost absent) in industrialized countries • Negative causation • Capabilities without opportunities • Reinforced by economic policies • Manifest in ‘jobless growth’ • Common to developing countries and industrialized countries • Feed-back effects in rich countries • Welfare states and unsustainable macroeconomics • Ageing of industrial societies

6. IV. THE POLITICAL CONTEXT • Policies and the political process • Economic interests • Political compulsions • Intersection of economics and politics in macro policies • Fiscal policy • Developing countries • Industrialized countries • Monetary policy • Developing countries • Industrialized countries • Role of ideology and institutions • Interaction of market economy and political democracy • Twist in the tale • Human development in the political process • Developing countries and industrialized countries • Rhetoric and reality • Checks and balances

7. V. CONCLUSIONS • Relationship not quite recognized • State of economies at macro level • Well-being of people at micro level • Causation runs in both directions • Positive • Negative • Developing countries and industrialized nations • Similarities • Differences • Political economy of policy design • Macroeconomics • Human development