Summary of 5 Puzzles in the International Economy

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Researcher Homi Kharas provides a thought-provoking look at five current and perplexing macroeconomic conditions: low net capital flows to developing economies, sluggish growth in global productivity, unresolvable externalities, elusive agreement about progress, and underinvestment in nutrition and education. In this brief but elucidating article, Kharas offers no new solutions, but he poses these conundrums in a way that will help readers better understand the challenges they present.

About the Author

Homi Kharas is interim vice president and director of the Global Economy and Development Program at the Brookings Institution.

 

Summary

The world’s economy is interconnected in complex tangles that raise consequential challenges. Five are especially critical due to the breadth of their impacts:

  1. “Why is so little capital flowing to emerging and developing countries?” – In 2019, net amounts moving into these economies will total about $4 billion, a paltry sum compared to their $35 trillion aggregate size and woefully inadequate to fund growth-generating infrastructure such as roads, ports, electricity and education.
  2. “What is going on with global productivity growth?” – ...

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