Welcome to Econ Talk, part of the Library of Economics and Liberty. I'm your host Russ Roberts

of George Mason University and Stanford University's Hoover Institution. Our website is econtalk.org

where you can subscribe, find other episodes, comment on this podcast, and find links to

other information related to today's conversation. Our email address is mailadicontalk.org. We'd

love to hear from you. Today is March 8, 2011, and my guest is Robert Townsend, the Elizabeth

and James Killian Professor of Economics at MIT. His latest book is Financial Systems in

Developing Economies, Growth in Equality and Policy Evaluation in Thailand. Rob, welcome

to Econ Talk. Thank you. Very glad to talk to you. And recent years, there's been tremendous

economic changes in the world at large, particularly in Asia. And by recent years, I mean, the

last two or three decades, what are some of the stylized facts of that experience? What do

we know about what's happened in terms of growth and development in particularly in Asia?

Well, of course, the most remarkable thing now is the growing presence of India and especially

China with very, very high rates of growth, even if you think they're exaggerated a bit

or the statistics are somewhat unreliable. There's no clear they're growing by leaps and bounds.

And that's the sequel to the earlier very high growth rates that we saw in Japan and

Korea and Singapore and so on. Why do we think Asia is growing so dramatically relative

to other poor areas of the world? Latin American, African, particular have not matched that

pace. And in particular, Africa has been relatively stagnant compared to the other two.

What do we know about what's going on there?

Yeah, these are the big mysteries. Actually, Latin America, if you go back in its history

to the four say the early 80s, they also had similarly high growth rates, but they didn't

persist. Mexico and other countries sort of basically stagnated a bit. Mexico will grow

...