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April 19, 2007

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Mario

Dear Professor,

The world does need another economist's blog, if it is Dani Rodrik's blog. So... please, keep on writing. I'm looking forward to hear about your paper on exchange rates and economic growth (by the way, I am a long-date supporter of your criticisms of the Washington Consensus). I'm working on current account global imbalances, that is why I am so interested in your opinion about such an issue (in general... any Rodrik's preference for their short-term governance?).

Karl Smith

My first question would be whether or not rapid economic growth is accompanied by rapid urbanization.

We accept that increasing returns are a part of the story behind cities. IF during periods of rapid national growth there is rapid urbanization then the increasing returns story should push through to the national level.

If this is the case the purposeful devaluation of the currency should be able to stimulate growth - at least on the path from non-urban to urban.

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