Inhaltsangabe
People around the world grow up with different sets of values guiding their vision and their behavior. Too often neglected by economists, those values constitute key factors in the way economies are structured and their potential for further growth. To a large extent, they explain why Japan has gone through multiple lost decades, why Nordic countries accept the highest tax rates in the world, making their societies much more equal, why China has such a large trade surplus with the US or why some nations become stuck in a middle-income trap. It is those values, coupled with the right policies, that ultimately determine the economic destiny of nations.In this book we explore how the combination of human values and policies affects national economic outcomes. We focus on key values conducive to growth: are people of a given nation, on average, hard-working, thrifty, do they trust each other, what is their attitude towards risk? The harder people work, the higher the growth potential. The willingness and ability to save determines to a large extent whether a country will grow through investments and exports vs consumption. Trust goes a long way to explaining wealth and income inequalities and the role that governments can play in minimizing those inequalities. Economies with highly risk-averse citizens will stall.We also identify policies which in our view have the greatest impact on economies. Market forces are essential for further growth. Political stability, in particular the absence of armed conflicts, is more conducive to growth than any specific form of government. An educated workforce breeds innovation and productivity. Corruption can seriously derail an economy. Sound fiscal and monetary policies are vital for an economy to go through its cycles and prevent crises. This book bridges the gap between those two sets of factors, recognizing that it is only by taking into consideration values and policies that we can truly understand how economies work.
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