Marktwirtschaft reparieren

In the pluralist showcase series by Rethinking Economics, Cahal Moran explores non-mainstream ideas in economics and how they are useful for explaining, understanding and predicting things in economics.

How countries achieve long-term GDP growth is up there with the most important topics in economics. As Nobel Laureate Robert Lucas put it “the consequences for human welfare involved in questions like these are simply staggering: once one starts to think about them, it is hard to think about anything else.” Ricardo Hausmann et al take a refreshing approach to this question in their Atlas of Economic Complexity. They argue a country’s growth depends on the complexity of its economy: it must have a diverse economy which produces a wide variety of products, including ones that cannot be produced much elsewhere. The Atlas goes into detail on exactly what complexity means, how it fits the data, and what this implies for development. Below I will offer a summary of their arguments, including some cool data visualisations.

The article discusses the state’s influence on innovation through financial support and provides examples how the state could receive a financial share of successful enterprises in order to keep on driving innovation in the future.

In this interview Mariana Mazzucato talks about economic actions governments need to take facing the Corona-crisis. Using the example of Britain, she argues that governmental bailouts need to be bound to commitment to sustainability.