Economic order in for change

HT Correspondent

New Delhi, Nov. 16 -- Innovation, technology and regulation of capital flows will define the way the global economy is administered in the coming years in an increasingly integrated world, which is still nursing multiple wounds of credit crisis that hit the financial sector four years ago, leading economists told delegates at the Hindustan Times Leadership Summit on Friday.

"The coming years will call for a lot of macro-rebalancing. This macro-financial volatility has proved to be difficult to eliminate," Erik Jones, professor and director of European Studies at the Paul H. Nitze School of Advanced International Studies and director the Bologna Institute of Policy Research of the Johns Hopkins University, said at a session on 'The Future of The Global Economy: Cause for Optimism or Pessimism?'

Parag Khanna, a leading geo-strategist and the director of the Hybrid Reality Institute, said the globalisation debate has moved decidedly towards the "flow of ideas, technology, innovation and people."

"Globalisation cannot be turned on and off like a switch," Khanna said, adding globalisation is not controlled by any one region.

According to Jones, democracy and markets "are good at sharing prosperity," but "not good at sharing burden."

"Countries will not be able to export their way out of prosperity," Jones said.

"We are witnessing a great transition in global capitalism," journalist and economist Anatole Kaletsky said.

Kaletsky said the mega-trends of the 1980s- end of communism, advent of the internet, creation of paper money not linked to any major asset like gold and the emergence of billions of new consumers and producers- will reinforce again in the coming years.

Britain's leading economist John Kay was of the view that world has misunderstood the strengths of a market-economy model.

"Markets are not about promoting unrestrained creation of private wealth. There is a need to create policies that foster innovation. I am pessimistic about how we will live in a world which may turn out to be increasingly hostile to innovation," said Kay a visiting professor of Economics at the LSE and a Fellow of St John's College, Oxford.

Published by HT Syndication with permission from Hindustan Times.