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Monday, October 29, 2012

 

The Next Convergence by Michael Spence - Book review


The Next Convergence

The Future of Economic Growth in a Multispeed World


By Michael Spence

Published: August 7, 2012
Format: Paperback, 320 pages
ISBN-10: 1250007704
ISBN-13: 978-1250007704
Publisher: Picador














"This book is about the 100-plus years that began in 1945 and will run to the middle of the twenty-first century. Since we are slightly over halfway along, we can think of it as a midterm report. It is about two parallel and interacting revolutions: the continuation of the Industrial Revolution in the advanced countries, and the sudden and dramatic spreading pattern of growth in the developing world", writes Professor of Economics at the Stern School of Business at New York University, and winner of the Nobel 2001 Prize in Economic Sciences, Michael Spence, in his brilliant and landmark book The Next Convergence: The Future of Economic Growth in a Multispeed World. The author describes how this century of rapid growth has created a fresh interrelationship between the developed and developing worlds, and the effect of this massive trend on the five billion people who live in the developing countries.

Michael Spence recognizes that while the huge asymmetries between the developing world and the developed world remain, their disparity is decreasing over time. The author refers to this narrowing of the gap as convergence, and this increasing interdependence bring with it fresh challenges for the entire global population. These new realities will require fresh perspectives, understanding, and solutions.

Michael Spence points out that we in the developed world will have to view these emerging challenges through the eyes of the people in the developing world. They in turn will have to see the issues through our eyes as well as their own. With the emerging nations rebounding faster from the 2008 global economic crisis faster than the advanced economies, these new economic centers are rapidly becoming the world's engines of economic growth.


Michael Spence (photo left) understands the increasing importance of the emerging countries to the overall global economy. The author points out that this rapid rise in production and consumer demand from the developing world is one of the untold stories of globalization. These new economies are critical to global demand for products and services, and are part of the forces for worldwide economic stability.

The author traces the history and future of globalization over one hundred years. Included in that historical examination is what happening in the previous fifty years, followed by some ideas of how the next fifty years may unfold in the world economy. The author divides the book into four overarching sections:

* The global economy and the developing countries
* Sustained high growth in the developing world
* The crisis and its afermath
* The future of growth

For me, the power of the book is how Michael Spence applies his economic analysis to the overall global economy, by tracing where it has been, and what the future may hold. the author presents his historical analysis in a clear and concise manner. His forecasts for the future are based on the existing data, including questioning whether current high rates of growth in the BRIC nations are sustainable, and how the developed world will respond to the increasing economic influence of the emerging markets.

Michael Spence examines the potential for more instability, and also the drives that work toward stabilization of the world economy. The book is very balanced in its approach, is free of extreme ideological viewpoints. Instead, Michael Spence offers a realistic consideration of the challenges and opportunities facing both the developed world and the emerging countries.

I highly recommend the important and well researched book The Next Convergence: The Future of Economic Growth in a Multispeed World by Michael Spence, to any business leaders, elected officials, public policy makers, academics, students, and anyone interested in the past, present, and future of the global economy. This landmark book will change the way you think about globalization and its possible future.

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