Capital market liberalization includes freeing up deposit and lending rates, opening up the market to foreign banks, and removing restrictions on capital account transactions and bank lending. The focus is on deregulation, not on finding the right regulatory structure.

Moreover, because we chose to finance the way by borrowing, our deficits and debt has soared, and this means we have less room for maneuver, less money available to stimulate the eocnomy in the way needed.

Similarly, payments for a dead soldier amount to only $500,000, which is far less than standard estimates of the lifetime economic cost of a death. This statistical value of a life in the US amounts to circa $6.5 million.

Development is about transforming the lives of people, not just transforming economies.

During my three years as chief economist of the World Bank, labor market issues were looked at through the lens of neoclassical economics. A standard message was to increase labor market flexibility. The not-so-subtle subtext was to lower wages and lay off unneeded workers.

It's actually a tribute to the quality of economics teaching that they have persuaded so many generations of students to believe in so much that seems so counter to what the world is like. Many of the things that I'm going to describe make so much more common sense than these notions that seem counter to what one's eyes see every day.

When you're facing the threat of recession, you need to have an expansionary monetary and fiscal policy. Pre-Keynesian, Hooverite views are dead everywhere except on 19th Street in Washington.