CARNEGIE COUNCIL - Transcript E-mail
Monday, 16 May 2011 12:06
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JOANNE MYERS: I'm Joanne Myers, director of Public Affairs Programs, and on behalf of the Carnegie Council, I want to thank you all for joining us.

This morning it is my great pleasure to welcome one of America's most distinguished economists to the Carnegie Council, Michael Spence. Among Professor Spence's many honors—and I do mean many—I am not only referring to the fact that he is a Rhodes Scholar or the recipient of the John Bates Clark medal, awarded to an economist under the age of 40, but he is the 2001 recipient of the Nobel Prize in Economic Sciences. We are fortunate to have him as our guest.

Today he will be addressing such critical economic questions as: How will the global economy develop over the next 50 years? What are appropriate economic models in the wake of the recent global financial crisis?

When we look around the world, we see economic change taking place everywhere. In some countries it is slow, while in other parts of the world development is taking place so rapidly that these advances will alter the history of a nation or even an entire continent within a span of years. The Industrial Revolution was one such phenomenon, when, for the first time in history, per-capita income of ordinary people began to rise and living standards started to undergo sustained growth. This occurred first in Britain, transferred to the European continent, and then the United States.

Although many lives were changed forever, this shift was confined only to industrialized nations, while the rest of the world remained below the poverty line.

Following World War II, there was a second revolution that altered the global economy. New advances in technology and increased production created more efficient economies so that profits rose. Countries that once lagged behind started growing at unprecedented rates.

In The Next Convergence Professor Spence writes that we are now witnessing the third century of the Industrial Revolution. He tells us that while the gap between advanced and developing countries is still there, for the first time in 250 years, this gap is becoming smaller and smaller. It is one of convergence rather than divergence. If these trends continue, he tells us, we will witness a merging of living standards resulting in a better life for billions of people.

Still, as with any change, there are challenges. For example, how can countries sustain this growth? What impact will this trend have on advanced economies? What will happen to populations, incomes, and natural resources when this growth appears? Will the global financial system be able to sustain the economic growth that is predicted?

In the four years that Professor Spence was chairman of the Commission on Growth and Development, a project launched in part by the World Bank, our guest had much time to think about these shifting patterns of economic activity in developing countries. When his chairmanship ended, Professor Spence knew he wanted to share what he had learned so that others could benefit from his experience. In writing The Next Convergence, I believe he has done just that. Not only has he taken the dynamics of developing economies to show how their growth and that of the global economy are interrelated, but he also provides critical insight to reveal how this new dynamic will affect us all.

In order to avail ourselves of his wisdom, please join me in giving a very warm welcome to our very distinguished guest, Michael Spence.

Thank you for joining us.

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