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Byline: Andrew G Haldane

Fast finance and slow growth

How can the state deter short-termism in finance and facilitate a better environment for the ‘patient capital’ needed for growth?

Fast finance and slow growth

How can the state deter short-termism in finance and facilitate a better environment for the ‘patient capital’ needed for growth?

Consider two countries – China and Italy. As recently as 1990, these economies were equal in size as measured by aggregate GDP at purchasing power parity exchange rates. But let us now put these countries on quite different trajectories for capital accumulation. Let China begin investing at double-digit rates for 20-plus years, while Italy accumulates capital at a rate of only two per cent per year. By 2013, China is now seven times larger than Italy. Indeed, China is creating an economy the size of Italy’s every two years; an economy the size of Greece’s every quarter; and an economy the size of Cyprus’ every week.

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Author Andrew G HaldanePosted on 28/09/201509/11/2018Categories Investment, Trade and CompetitivenessLeave a comment on Fast finance and slow growth

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