This is not directly related to the Millennium Development Goals, but the current state of the world's economy will have a direct impact on implementing those goals. It also has a relationship with concepts such as PRSP (Poverty Reduction Strategy Papers). One interesting fact, Central Banks do not include food or energy in their inflation measurements which impacts the poor more than the rich. This is where my libertarian and progress sides are most in conflict. The blog Road to the Horizon provides a humanitarian perspective on the recent financial bailout in the United States by asking How much is $700 billion really?
MIT World » : The U.S. and the World’s Recession
It’s been true for years, notes Rigobon, that “oil is unconditionally negatively correlated with cereals.” If oil is up, maize, sorghum and wheat prices are down. But this has recently changed, a sign “of the unique times we’re in, the policy challenges we’re facing.” We are simultaneously facing recession (due in large part to the sub-prime mortgage crisis), and inflation, in both food and oil prices. Central banks, he notes with scorn and wonderment, don’t include food and energy in their calculations of “core inflation.” If the job of these banks and government is to take care of their citizens, they must respond to this crisis along the lines of the response to 9/11 or Enron. Rigobon endorses well-communicated, transparent policies, and some tough measures like interest rate increases.
I found this after having viewed his most recent talk from MIT. Rigobon can be rather irreverant, but there are many points of connection today with what he was saying back in 2004. The point about 3 billion people living on less than two dollars a day is more relevant to the Millennium Development Goals.
MIT World » : Institutions, Geography, and GrowthABOUT THE LECTURE:
Three billion people on earth live on less than two dollars a day. A relative handful of us fare astronomically better. How do economists account for global “haves” and “have-nots”? Roberto Rigobon attributes a vast income inequality across countries to four connecting factors: luck, geography, quality of institutions, and quality of policies.
