Esther Duflo's Five Lessons For Harder Times

On 11 September 2020, the School of Public Affairs welcomed 2019 Nobel Prize-winning economist Esther Duflo for its inaugural lecture, “Good Economics for Harder Times.” The title of this talk plays on the title of her book co-written with Abhijit V. Banerjee, Good Economics for Hard Times, published in November 2019, before the global health crisis hit. In the context at the start of the 2020/2021 academic year, Duflo discusses “harder times,” explaining that the global situation was already tough before the pandemic, but is now even more complex.

Duflo opens her talk by stating that most of the issues that we face today are core economic ones. She then discusses five lessons valid for hard times, which continue to hold true in these even harder times: 

  • Governments intervene in problems that markets fail to solve 
  • Financial incentives do not prompt recipients to work less 
  • The economy is stickier than assumed 
  • Racism is not a given, it is an outcome 
  • Dignity matters for job seekers

Duflo admits that governments are often an easy punching bag, but argues that the Covid-19 crisis reminds us of their importance. Who can mandate mask wearing? Who can ensure that countries invest billions of dollars in vaccines? Who can assure that countries have enough hospital beds? Only governments have this control, she explains.

In light of this power, Duflo reminds students of their responsibility: “You are lucky to receive the tools that will enable you to be useful in the world, during this crisis and future ones.”

Watch the full lecture on replay below.

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