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The Next Convergence: The Future of Economic Growth in a Multispeed World
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The Next Convergence: The Future of Economic Growth in a Multispeed World

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by Michael Spence
 

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With the British Industrial Revolution, part of the world’s population started to experience extraordinary economic growth—leading to enormous gaps in wealth and living standards between the industrialized West and the rest of the world. This pattern of divergence reversed after World War II, and now we are midway through a century of high and

Overview

With the British Industrial Revolution, part of the world’s population started to experience extraordinary economic growth—leading to enormous gaps in wealth and living standards between the industrialized West and the rest of the world. This pattern of divergence reversed after World War II, and now we are midway through a century of high and accelerating growth in the developing world and a new convergence with the advanced countries—a trend that is set to reshape the world.

Michael Spence, winner of the Nobel Prize in Economic Sciences, explains what happened to cause this dramatic shift in the prospects of the five billion people who live in developing countries. The growth rates are extraordinary, and continuing them presents unprecedented challenges in governance, international coordination, and ecological sustainability. The implications for those living in the advanced countries are great but little understood.

Spence clearly and boldly describes what’s at stake for all of us as he looks ahead to how the global economy will develop over the next fifty years. The Next Convergence is certain to spark a heated debate how best to move forward in the post-crisis period and reset the balance between national and international economic interests, and short-term fixes and long-term sustainability.

Editorial Reviews

World Bank Senior Vice President and Chief Economi Justin Yifu Lin

In recent years, developing countries have become an increasingly important driver of growth in the world economy, bringing about the prospect of a new and multi-polar landscape of the global economy in which the traditional gap in living standards between developing and advanced countries may possibly disappear. Michael Spence has written a succinct and clear analysis of the forces behind this fascinating process that is immensely readable, yet does justice to the complexity of the issues involved. Among the many books written on the new world economy this is one of the most profound. A must-read for everyone interested in the mega-trends shaping the future of the world economy.
winner of the 1987 Nobel Memorial Prize in Economi Robert Solow

I always knew that Mike Spence was a terrific economist. After reading this book I realize that he also has the rare ability to see the world economy--all of it, rich and poor--with clarity, reason and empathy. If you are looking for a lucid, readable, consistent, unprejudiced picture of what has been happening and what might happen next in the world economy, this is an excellent place to find it.
Daniel Gross
In The Next Convergence, [Spence] presents a nuanced, highly readable argument on the symbiotic, fraught relationship between today's booming developing markets and the seemingly stagnant developed ones…Spence's use of data and history is as impressive as his avoidance of empty sloganeering. Rather than offer deterministic and hopelessly naive bromides, Spence offers deep insights with a winning, refreshing humility rarely seen in Nobel Prize-winning economists.
—The Washington Post
From the Publisher

“Impressive...Spence offers deep insights with a winning, refreshing humility rarely seen in Nobel Prize-winning economists.” —The Washington Post

“An intelligent, rational, an dhumane book about the great economic event of our era...Anyone seeking a commonsense guide to the transformation underway need look no further.” —Financial Times (London)

“Cogent, comprehensive, and compelling...Especially trenchant and timely.” —The Huffington Post

“Rarely does one find a book that is so powerful in its analysis, timely in its topic, relevant in its thinking, and clear in its exposition.... This is by far the best book I have seen on today's historical growth transformation.” —Mohamed A. El-Erian, author of When Markets Collide

“Fascinating...Having Spence as a brilliant guide, intimate with both the research and policy frontiers, is a perfect way to get up to speed.... Engaging, intellectual treatments like this one will surely make progress easier.” —Science

Product Details

ISBN-13:
9780374159757
Publisher:
Farrar, Straus and Giroux
Publication date:
05/10/2011
Pages:
320
Product dimensions:
6.30(w) x 9.00(h) x 1.30(d)

Read an Excerpt

The Next Convergence

The Future of Economic Growth in a Multispeed World
By Michael Spence

Farrar, Straus and Giroux

Copyright © 2011 Michael Spence
All right reserved.

ISBN: 9780374159757

As the global economy emerged in the post war period, the colonial system disappeared. Old colonies became new countries, some of them with very odd shapes and geographical positions. With no history of self-governance as nation states, they struggled to find their way, economically and in terms of stable governance. India created the world’s largest and most complex democracy—a modern miracle. China turned to communism, adopted the centrally planned model of economic organization, and made very little measurable economic progress for 29 years, but perhaps sowed the seeds of its future rise by educating the vast majority of its people. It dramatically changed direction in 1978 and became the largest (in population) and fastest growing country in the history of the world.

What no one saw clearly was that in the post war period, the economic party that had been running for 200 years in a small subset of the population was about to spread to much of the rest of the world.

The implications of this new convergence are profound and extensive. The costs of things will change. Goods and services that require human time and effort will become relatively more expensive, an inevitable consequence of the eventual decline of low cost underemployed labor in the global economy. Economic forces and incentives will try to make them less expensive by allocating more capital to labor and hence reducing the labor input required. But there are limits to substituting capital for labor, though these limits are moving as technology changes the art of the possible. The abundance of underemployed labor in the world economy has in a sense delayed the arrival of labor saving technology. But this will end in the current century.



Continues...

Excerpted from The Next Convergence by Michael Spence Copyright © 2011 by Michael Spence. Excerpted by permission.
All rights reserved. No part of this excerpt may be reproduced or reprinted without permission in writing from the publisher.
Excerpts are provided by Dial-A-Book Inc. solely for the personal use of visitors to this web site.

Meet the Author

Michael Spence is a Professor of Economics at the Stern School of Business at New York University, a senior fellow at the Hoover Institution, and was the chairman of the independent Commission on Growth and Development. Winner of the Nobel 2001 Prize in Economic Sciences, he lives in California and Italy.

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