It can be morning again for the world’s middle class, by Lawrence Summers, FT [open link]:The most challenging economic issue ahead of us involves a group that will barely be represented at this week’s annual Davos summit — the middle classes of the world’s industrial countries..., no one should lose sight of the fact that without substantial changes in policy the prospects for the middle class globally are at best highly problematic.
First, the economic growth that is a necessary condition for rising incomes is threatened by the spectre of secular stagnation and deflation. ... Second, the capacity of our economies to sustain increasing growth and provide for rising living standards is not assured on the current policy path. ... Third, if it is to benefit the middle class, prosperity must be inclusive and in the current environment this is far from assured. ...
The experience of many countries and many eras shows that sustained growth in middle class living standards is attainable. But it requires elites to recognise its importance and commit themselves to its achievement. That must be the focus of this year’s Davos.