Nobel laureates lead new group to tackle world's economic woes

Professor Joseph Stiglitz from Columbia University, a Nobel Laureate in Economics Sciences, speaking at a talk for Bank of Singapore clients on Oct 10, 2014. PHOTO: BANK OF SINGAPORE

LONDON (BLOOMBERG) - Nobel laureates Joseph Stiglitz and Michael Spence are leading a new initiative to find solutions to what they see as a dysfunctioning market economy.

The Commission on Global Economic Transformation is aiming to tackle global economic challenges from stagnating growth and inequality to migration and climate change. It intends to meet with elected officials and policy makers to share its recommendations.

The standard market economy "has not been working well for most citizens" and "the failure of it to work has clearly had political consequences," Stiglitz said. "The recognition that that model is not working is itself a reason for the formation of the commission."

A sluggish recovery from the global financial crisis and concerns about globalization have helped fuel a rise of populist movements across the US and Europe. Stiglitz said a "third way" is needed because globalization has failed many citizens and "nativist" policies of US President Donald Trump are "going to be equally bad for the same group of people."

The group, unveiled on Sunday (Oct 22) by the Institute for New Economic Thinking at its conference in Edinburgh, will produce a final report in 2019 with findings and recommendations.

"We need new rules and coordinated governance to address destructive tendencies rapidly emerging in the global economy, and to protect human communities subject to them," Stiglitz said in a statement.

The two economists, along with George Akerlof, won the Nobel in economic sciences in 2001 for their work in explaining how buyers and sellers use information in business transactions. The commission also includes Adair Turner, INET chairman and former UK Financial Services Authority head; Oxfam International executive director Winnie Byanyima; and Mohamed El-Erian, Allianz SE's chief economic adviser and a Bloomberg View columnist.

Join ST's Telegram channel and get the latest breaking news delivered to you.