In Which I Call for a More Optimistic Martin Wolf…

Live from Lima, Peru: Martin Wolf, can I get you to say something optimistic?

The last four times I have been in the same room with Martin Wolf, he has left me profoundly depressed. He has just done it again–by reminding me how many of the lessons of the 1930s have been lost, and how much the Federal Reserve needs to assume the role of global Kindlebergian hegemon that it is currently refusing. So I had a question to ask that I hoped would elicit an optimistic answer…

Alas! I did not get to ask it. But here it is:

Let me see if I can get you to agree with an optimistic view of emerging markets’ future–if and after we can resolve all the difficulties that Ken Rogoff calls the ongoing hangover of the debt supersupercyle…

Back before 1970 we had not just non-convergence but divergence: the Matthew 25:29 global economy, as the rest of the world grew much more slowly than the North Atlantic core plus the East Asian and Peripheral Europe convergence club. Since 1970 we have had China, and now India, plus on average not divergence but relatively stasis elsewhere. Does not this suggest that we would be seeing “convergencence” in the emerging world if not for the fact that China is bigfooting everybody else out of the niches for export-led convergence growth? And that the future looks relatively bright for emerging-market convergence as China transitions to a different growth model, and open up the export-led convergence growth space?

Can I get you to agree with that?