Perhaps the hardest challenge has been to persuade the public, impatient for rapid growth, of the need to ensure stability first. Growth, it is argued, is always more important, regardless of the looming economic risks.
Interpretation
The quote emphasizes the importance of stability over rapid growth in the face of potential economic risks.
Raghuram Rajan expresses a critical perspective on the common belief that growth should be prioritized above all else. He argues that convincing the public to value stability, especially in uncertain economic times, is a significant challenge. The quote underscores the tension between the desire for immediate growth and the necessity of ensuring a stable foundation, which can prevent larger economic problems in the future.
In practice
During an economic policy discussion, one might quote this to advocate for prioritizing stability over immediate growth.
The U.S. should worry about the effects of its polices on the rest of the world. We would like to live in a world where countries take into account the effect of their policies on other countries and do what is right, broadly, rather than what is just right given the circumstances of that country.
Customers often value a good more when its price goes up. One reason may be its signaling value. An expensive handcrafted mechanical watch may tell time no more accurately than a cheap quartz model; but, because few people can afford one, buying it signals that the owner is rich.
The problem with forbearance is that it always looks like a good thing to do until it stops working.
Too many years away from academia renders you pretty incompetent at research and teaching. So I had to go back.
The gap in India has always been between the promise and the execution.
Democratic accountability means that governments must be popularly accepted, with citizens empowered to replace corrupt or incompetent rulers.
Money is different from all other commodities: other things being equal, more shoes, or more discoveries of oil or copper benefit society, since they help alleviate natural scarcity. But once a commodity is established as a money on the market, no more money at all is needed. Since the only use of money is for exchange and reckoning, more dollars or pounds or marks in circulation cannot confer a social benefit: they will simply dilute the exchange value of every existing dollar or pound or mark.
There are severe limits to the good that the government can do for the economy, but there are almost no limits to the harm it can do.
Economists love to talk about incentives, but the bottom line is that people hate being controlled or manipulated, even when done through voluntary institutions. This is one of the most important tensions in capitalism.
The hidden hand of the market will never work without a hidden fist.
No pecuniary consideration is more urgent, than the regular redemption and discharge of the public debt: on none can delay be more injurious, or an economy of time more valuable.
When corporations refuse to practice due diligence by not establishing grievance mechanisms for remedy of abuses against the hidden 94% of their workforce in their global supply chains, they perpetuate a depraved model of profit-making that has driven inequality to a level now seen as a global risk in itself.
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