Rogoff: Rethinking the Growth Imperative

Ken Rogoff:

Rethinking the Growth Imperative, by Kenneth Rogoff, Commentary, Project Syndicate: Modern macroeconomics often seems to treat rapid and stable economic growth as the be-all and end-all of policy. ... But does it really make sense to take growth as the main social objective in perpetuity, as economics textbooks implicitly assume? ... Wouldn’t it make more sense to worry whether conflict or global warming might produce a catastrophe that derails society for centuries or more?

Even if one thinks narrowly about one’s own descendants, presumably one hopes that they will be thriving... Assuming that they are significantly better off than one’s own generation, how important is their absolute level of income?

Perhaps a deeper rationale underlying the growth imperative in many countries stems from concerns about national prestige and national security. ... An economic race for global power is certainly an understandable rationale for focusing on long-term growth, but if such competition is really a central justification for this focus, then we need to re-examine standard macroeconomic models, which ignore this issue entirely. ...

In a period of great economic uncertainty, it may seem inappropriate to question the growth imperative. But, then again, perhaps a crisis is exactly the occasion to rethink the longer-term goals of global economic policy.