1. The world is seeing increased GDP growth: For the first time since the global financial crisis, we are seeing an uptick in GDP growth rates in all the major regions of the world. This is seemingly a moment for celebration, but I recommend proceeding with caution.
  2. Underlying economic indicators show cause for concern: These same regions have seen a slowdown in investment growth over the past four or five years, although there has been a recent pickup. This means that potential growth will be limited in the near future, casting doubt on the sustainability of the current resurgence.
  3. Countries need to overcome political hurdles to invest in infrastructure and human capital: If TFP growth is likely to slow, developing countries need to invest in capital and labor as sources of growth. The perennial themes of infrastructure and human capital have become that much more important
  4. Transparency is for success: To make progress on the accumulation of labor and capital, therefore, we need to overcome the political obstacles to reform. How? One way is to publish the information about political capture, so that the public can hold politicians to account for reforms.

Read the full article on the global economy by Shanta Devarajan at Brookings