Dean Glenn Hubbard, the Russell L. Carson Professor of Finance and Economics, expressed cautious optimism about the long-term future of the United States economy at a symposium on February 4. In part, he said, this is due to the prospects he sees for innovation and productivity growth on the horizon.
What can—and can’t—be predicted about the future of the world economy was as much a part of the symposium as actual projections. Gideon Rose, editor of Foreign Affairs, moderated the discussion, which featured five leading economists. “I can tell which questions to ask,” Hubbard said. “I’m not sure I can answer them.”
For example, said Hubbard, when will China experience a significant financial crisis because of its systematic misallocation of credit? “I can’t tell you that it’s today, tomorrow, or next year,” Hubbard said. “But I can tell you that I think it is likely to happen.” Shang-Jin Wei, the NT Wang Professor of Chinese Business and Economy and the director of the Jerome A. Chazen Institute of International Business, agreed that a crisis in China would happen. “Yet the country will grow out of the crisis,” he predicted, “and do reasonably well.”
On prediction, Nobel Laureate Joseph Stiglitz, University professor of finance and economics, urged economists to show humility. “When it comes to something like the crisis of 2008,” he said, “we did pretty badly.” But he did offer climate change as an example of a future driver of change. At this point, though, it’s difficult to predict what its exact impact will be, he said.
The three Columbia professors were joined on the panel by Jacob Frenkel, chairman of JPMorganChase International, and Ruchir Sharma, head of emerging markets and global macro at Morgan Stanley Investment Management. “Predicting the Future of the World Economy” was sponsored by the Jerome A. Chazen Institute of International Business.
The Chazen Institute offers programs for students and faculty members to develop international perspectives in business practice and policy. It was founded in 1991 by Jerome A. Chazen ’50 to serve as a link between the School and a global community of scholars and executives.