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.
If stability and efficiency required that there existed markets that extended infinitely far into the future - and these markets clearly did not exist - what assurance do we have of the stability and efficiency of the capitalist system?
When people begin anticipating inflation, it doesn't do you any good anymore, because any benefit of inflation comes from the fact that you do better than you thought you were going to do.
Drug companies spend more on advertising and marketing than on research, more on research on lifestyle drugs than on life saving drugs, and almost nothing on diseases that affect developing countries only. This is not surprising. Poor people cannot afford drugs, and drug companies make investments that yield the highest returns.
I look under the skin of countries' economies, and I help them make better decisions and be stronger, to prosper and create employment.
In the Imperialist Era, the foreign loan played an outstanding part as a means for young capitalist countries to acquire independence.
What many economists fail to understand is that poor people are no less concerned about improving their lot and that of their children than rich people are.
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