ISSN (Print) - 0012-9976 | ISSN (Online) - 2349-8846

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Underconsumption as an Economic Fault

Employment, Growth and Development: Essays on a Changing World Economy by Deepak Nayyar, Oxon and New York: Routledge, 2017; pp xiv + 260, `895.


Deepak Nayyar’s book is composed of articles he has written since 2010, including two in the Economic & Political Weekly (EPW). As a distinguished social thinker and social scientist, he has, as usual, a lot of interesting things to say on a broad range of topics, and the acknowledgements of discussions he held on several of them with figures as disparate as Romila Thapar and Martin Wolf, to say nothing of his research assistants, demonstrate the wide variety of discussions he has held. But, as his very illuminating introduction shows, there is a central thrust and certain overarching themes in the book and that is what makes it valuable and permits us to have our own discussion with it. The book is concerned with both the developed and developing economies and their interaction. In fact, one of its merits is that it does a good deal of comparative analysis using a long-term historical perspective of both developed and developing economies.

Globalisation over the period since 2000 has considerably increased the weight of the BRICS (Brazil, Russia, India, China and South Africa) in particular in the world economy and even their per capita incomes—the Great Convergence. This convergence occurred despite much unfairness to the developing countries in the international trade and finance system, which the developing countries themselves should use their new weight to combine to remedy. Nayyar presents some discussion of how this might occur. Some commentators like Steven Radelitz (2015) see this convergence as an entirely positive phenomenon. However, as Nayyar points out, the resulting growth in income has not resulted in growth in employment and is connected with growing domestic inequality both between persons and regions within the countries concerned. Without increasing equality, Nayyar contends, the developing countries’1 growth, particularly in the BRICS, will not be sustainable. This is both from the political angle, but also as will be seen below, from a general macroeconomic point of view.

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Updated On : 20th Nov, 2017
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