FROMFROM THETHE EDITOREDITOR

46 Fifty Years of Finance & Development Which Way the Wind Blows Times change and so has the focus of F&D over the past half century, at least as reflected in the OU can call this our Bob Dylan issue. It may seem words most commonly used in the magazine odd for an economics magazine to draw inspiration 48 Picture This: Sound Money from the legendary singer/songwriter, but one of his Live music’s debut as a big export earner most famous lines, “The times, they are a-changin,’” Simon Willson Yreverberated through our corridors as we put together this spe- cial issue on the global economy’s past and future. 50ent er SOntage C We weren’t humming the tune to pass the time. The lyr- The international monetary system has changed ics seemed especially relevant to us this year, as we mark the dramatically over the past seven decades, and the 70th anniversary of the IMF and World Bank and the 50th IMF has adapted accordingly anniversary of F&D. The world has seen a staggering amount Atish Rex Ghosh of change in the past seven decades. So, with these two anniversaries in mind and with Dylan’s ode to changing times in the air, we focused our attention on DEPARTMENTS the transformation of the global economy—looking back and 2 People in Economics looking ahead. We wanted to address the question, what will Path Breaker the global economy look like in another 70 years? 2 Janet Stotsky profiles Kenneth J. To help us, we turned to some of the sharpest minds in Arrow, a Nobel Prize–winning theorist who has economics. We asked five Nobel laureates—George Akerlof, Paul Krugman, Robert Solow, Michael Spence, and Joseph done pioneering work in many areas of economics Stiglitz—to share their thoughts on which single “frontier” 53 Back to Basics issue promises to shape the economic landscape in the years What Is Keynesian Economics? ahead. Their responses might surprise you. Elsewhere, IMF Chief Christine Lagarde charts a course The central tenet of this school of thought is that for the IMF in the next decade in a Straight Talk piece, and government intervention can stabilize the economy IMF Chief Economist Olivier Blanchard distills the lessons Sarwat Jahan, Ahmed Saber Mahmud, and Chris of the most jarring economic event in recent memory—the Papageorgiou 2008 global financial crisis—and underscores the need for 55 Book Reviews economists to change the way they look at the world. Dylan The Summit: The Biggest Battle of the Second World was on the minds of Ayhan Kose and Ezgi Ozturk, who begin War—Fought Behind Closed Doors, Ed Conway their chart-article on economic transformations of the past Money and Tough Love: On Tour with the IMF, 70 years with words from the singer himself. Liaquat Ahamed Other articles on the global economy’s past and future Creating a Learning Society: A New Approach include a piece on the perils and promise of globalization by to Growth, Development, and Social Progress, Martin Wolf of the Financial Times; a look at economic trends Joseph E. Stiglitz and Bruce C. Greenwald that can help us prepare for future challenges by Kalpana Kochhar, Yan Sun, Evridiki Tsounta, and Niklas Westelius; and a primer on the postwar monetary system by Rex Ghosh. Illustration: pp. 28–30, Margaret Scott; pp. 39–45, Nick Galifianakis. Articles on the future of energy in the global economy by Photography: Cover, Paul Cooklin/Getty Images; pp. 2, 4, Noah Berger/IMF; p. 6, Jeffrey Ball and on measuring inequality—the most hotly FreezeFrameStudio/iStock; p. 12, iStock; p. 14, Michael Spilotro/IMF; p. 15, Paul debated economic issue of recent days—by Jonathan Ostry Vallejos/El Comercio de Peru/Newscom; p. 16, Basso Cannarsa/LUZPhoto/Redux; and Andrew Berg round out the package. p. 17, Andrea Merola/epa/Corbis; p. 18, Bloomberg via Getty Images; p. 20, In keeping with our “change” theme, we sought to try a few Barcelona Graduate School of Economics, Baltel/SIPA/Newscom, Ed Quinn, Dan things for the first time: cartoonist Nick Galifianakis and Joe Dry; p. 21, Princeton University, Steve Castillo, TT News Agency/Reuters/Newscom, Procopio tell the story of the IMF’s origins in a way that’s never London Business School, Genevieve Shiffrar, University of Michigan; p. 22, Bartosz been done before in the pages of F&D—a seven-page comic. Hadyniak/Getty Images; p. 26, Stephen Jaffe/IMF; p. 32, Larry W. Smith/EPA/ And to press the music theme a bit further, our Picture This Newscom; pp. 35, 38, Oktay Ortakcioglu/Getty Images; pp. 46–47, Wordle.net; pp. looks at the Beatles and their role as an export earner. 48–49, Keystone Press/ZumaPress/Newscom; p. 48, Getty Images, Daily Mirror Finally, we profile a giant in economics—Nobel winner Mirrorpix/Newscom; p. 49, Robert Whitaker/Getty Images, Robert Whitaker/Getty and Stanford professor Ken Arrow, who built on an early pas- Images, iStock; p. 50, IMF file photos; p. 51, Padraic Hughes/IMF, Stephen Jaffe/ IMF; pp. 55–57, Michael Spilotro/IMF. sion for math and work in meteorology during World War II to launch a storied career in economics. To paraphrase Mr. Dylan, Ken Arrow certainly knows which way the wind blows.

Read online at www.imf.org/fandd Jeffrey Hayden Editor-in-Chief Visit F&D’s Facebook page: www.facebook.com/FinanceandDevelopment Finance & Development September 2014 1 ©International Monetary Fund. Not for Redistribution