An economics fix
The Nobel to work on growth and long-run sustainability frames a crucial priority
American economists William D. Nordhaus and Paul M. Romer were jointly awarded the 50th economics Nobel prize this week in recognition(मान्यता) of their work on economic growth and its long-run sustainability(स्थिरता). The Nobel committee noted that the duo’s work “brought us considerably(पर्याप्त रूप में/बड़े पैमाने पर) closer to answering the important question of how we can achieve sustained(निरंतर/लगातार) and sustainable(टिकाऊ) economic growth”. The committee’s praise is fitting as both economists devoted(तत्पर/समर्पित) their careers to the study of the various “externalities(आकार/बाहरी कारक)” or “spillovers” that affect economic growth in a market economy. Mr. Nordhaus, for one, has been a pioneer(अग्रणी/संचालन करना) in the movement towards quantifying the impact of economic growth on the climate(मौसम) and, in turn, the impact of climate change on economic growth. To correct this problem, he recommended imposing appropriate(उपयुक्त/यथोचित) carbon taxes to curb pollution that was detrimental(हानिकारक/नुक़सानदेह) to growth in the long run. Mr. Romer, on the other hand, studied the importance of technology in achieving economic growth. He proposed the endogenous(अंतर्जात/अन्तःविकसित) growth model where technological progress is seen as the outgrowth of businesses and other entities(संस्थाओं) investing in research and development. At the same time, he recognised ways in which the market economy may undersupply technological innovations(नई खोज/नई पद्धति) . Consequently(फलस्वरूप), he recommended the use of subsidies, patents and other forms of government intervention(हस्तक्षेप) to encourage economic growth through increased investment in technology. In essence, the Nobel committee’s decision is a recognition of economic research concerning market failure.
Of course, critics have highlighted flaws in the works of these two noted economists. For one, it may often be impossible to arrive at an objective measure(उपाय) of the carbon tax rate or the ideal amount of pollution to allow in a developing economy. It is equally troublesome(परेशानी/कष्टप्रद) when one needs to determine how much subsidy, or other forms of government support, should be allotted towards research and development. Even though mathematical models have been devised to address these problems, they are only as good as the data fed into them. Further, such decisions regarding the perfect carbon tax rate or the ideal subsidy allocation are likely to be determined(निर्धारित/स्थित) by political considerations rather than simply pure economics. So the threat(आशंका/ख़तरा) of government failure may have to be taken as seriously as the effects of market failure. These concerns lead to questions about the real-world impact of the policies supported by the pair. Nonetheless, many would argue(तर्क करना) that Mr. Nordhaus and Mr. Romer’s works are an improvement from the past in that they try to use the market mechanism itself to address its failures. The Nobel committee has done well to recognise important work on issues that are particularly(विशेष रूप) relevant(प्रस्तुत/उचित/योग्य) to the developing world.
Important Vocabulary
1.Devoted(तत्पर/समर्पित)
Synonyms: ardent, caring, concerned, dear, dedicated
Antonyms: apathetic, dishonest, disloyal, faithless, false
2.Detrimental(हानिकारक/नुक़सानदेह)
Synonyms: adverse, destructive, disturbing, harmful, hurtful
Antonyms: aiding, assisting, favorable, friendly, good
3.Endogenous(अंतर्जात/अन्तःविकसित)
Synonyms: internal, remote, domestic, gut, home
Antonyms: business, open,public, revealed, unconcealed
4.Pioneer (अग्रणी/संचालन करना)
Synonyms: avant-garde, brave, head, inaugural, initial
Antonyms: secondary, following, last, late, later
5.Relevant(प्रस्तुत/उचित/योग्य)
Synonyms: admissible, applicable, compatible, consistent, germane
Antonyms: improper, inapplicable, inappropriate, incompatible, insignificant
6.Troublesome(परेशानी/कष्टप्रद)
Synonyms: alarming, annoying, burdensome, damaging, dangerous
Antonyms: agreeable, aiding, beneficial, delicate, easy
