Sunday, October 11, 2009

Video Interview with Joseph Stiglitz

First of all, thanks to Jason Welker for the link.

Here's a very good video interview with the Nobel-prize winning economist and Columbia University professor Joseph Stiglitz. It's from the on-line edition of The New Yorker.

Stiglitz is an outspoken critic of globalization (an area of disagreement I have with him). He has a rather pessimistic view of the recovery. He does think we need more investment and less consumption. He seems to be of the mind that incentives are misaligned.  Are there some externalities here?  I think one can make the case. Judging from what he said, there are clearly costs/benefits that are accruing to parties that were not part of the original transactions. My question is "to what extent are these the result of prior regulatory structures that no longer serve there purpose, or may not have been appropriate to begin with?"

Stiglitz's approach of government-directed investment strikes me as somewhat Keynesian. At the same time, he advocates a balance between government and business. He is as concerned about government failure as business failure. His views on institutional aspects of the economy are interesting; as are his criticisms about government intervention providing the wrong incentives. Give it a look, if you are so inclined.

I welcome your thoughts on the video.

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