Global economic visionaries discuss turbulence, tech

By Vanisha Rajesh Singh

In a stimulating panel discussion that brought together eminent economic minds, Nobel Laureate Professor A. Michael Spence, Professor Rohinton Medhora, Chairman of the Institute for New Economic Thinking (INET), and Professor Rob Johnson, President of INET, engaged in a dialogue with Ajaya Sharma, Senior Editor and Finance Specialist at ET Now. This insightful conversation went deep into the core of economic change, the shifts brought about by the pandemic and uncovering the potential of India’s path to economic growth.

The conversation opened with Sharma's probing questions to Spence about the ongoing economic turbulence. Spence, in his response, talked about the essence of economic change, framing it as a natural and turbulent process. He shed light on risks and their diversification, particularly in developing countries. "Due to the pandemic, we've experienced inflationary pressures and a rapid surge in interest rates, which happened because of supply disruptions," he said.

Sharma, leading the discussion, questioned Spence about the possibility of financial markets reverting to pre-pandemic conditions. Spence's response was firm, "No, we are not returning to the pre-pandemic norm; that would be irrational. The post-pandemic world brings with it higher real interest rates, increased capital costs, and an economic landscape distinct from what we've known for the past four decades."

Turning the lens toward technology and AI, Spence highlighted, "We are witnessing a rapid evolution of powerful tools. For example, Chat GPT achieved remarkable success, attracting 100 million users in just two months." Expressing concern, he added, "Generative AI is a powerful tool based on how quickly it changes its domains. Automation bias poses a threat too, which is terrifying. We need policies to prevent AI misuse while ensuring broad and responsible access for all."

Sharma then shifted the focus to the intersection of AI and media, questioning Spence about the imperative for increased regulation. “We need more regulation to close information gaps and tackle misinformation today. It is important to balance information flow in this AI-driven world,” stressed Spence.

As the discussion continued, Professor Medhora offered interesting insights into the governance dynamics and technological disruption. Shedding light on the shift towards ‘intangible’ assets, he talked about potential difficulties small Indian businesses could encounter in terms of technology. He emphasized how crucial the government is in guiding the way forward, and that there needs to be policies to maintain trustworthy information. In his words, "Government intervention is important for guiding us towards excellence, safeguarding information purity, and preventing the spread of false news."

Expanding on governance, Medhora said, "Most countries are grappling with the challenge of governing in a world where wealth resides in intangibles. Training the current generation to adapt and control this environment is of utmost importance."

Professor Johnson further enriched the discussion, exploring India's distinctive economic growth models and its Aatmanirbhar concept. He commended India's technological sophistication, envisioning its potential contribution to the rapid growth of the African continent. Johnson eloquently remarked, "We must redefine what 'we' means, many countries overlook this aspect. India stands out as a visionary, possessing clarity in these areas."

Towards the end of the discussion, as the panel probed into India's sustainable growth prospect, Spence radiated optimism, stating, "There's no reason why India can't sustain growth. With its youthful demographic and unparalleled potential, India is experiencing remarkable expansion at an extraordinary pace."