Friday, April 28, 2006

Indian Economic Resurgence


India is picking up economic speed with much gusto and all cylinders firing latest number crunching by the mavens suggests China-like growth figures for the quarter. But it needs to be asked : could it be that the growth engine would splutter and stall if we fail to have the right policies in place now? And are we doing enough to chug along fine into the future?

But first, a word about growth economics. The field was much neglected for years, the world over.
Indeed,up until circa 1986, most macroeconomics classes and texts simply relegated long-run growth issues to a marginal role or simply neglected it altogether.

Economists have of course long accepted the notion that technology and expertise is the most important engine for economic growth. But until recently economic models couldn't really say how innovation and newer techniques would spur productivity and output. New empirical research not only recognizes the importance of technical advance and newer way of doing things, but actually explains how the process occurs and describes the critical role of institutional arrangements in the process.

But it's not just technology that's key to productivity and growth, it's the ability of people to develop and use technology. The "New Economy" requires higher levels of education, including high-tech skills and opportunities and the open-mindedness for lifelong leaning to keep up with the constantly evolving demands of the Information Age we live in.

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