The United States faces short- and long-term challenges in reducing the unemployment rate and creating new jobs that call on its strengths. In this excerpted interview at the World Economic Forum in Davos, MGI's James Manyika speaks with Professor Peter Diamond, who argues that fiscal stimulus is critical to job creation in the United States, but that it should be deployed both to drive continued recovery and to lay the foundations for long-term competitiveness.
Peter Diamond was awarded the Nobel Prize in economics in 2010 for his work in the area “search theory,” which has shed considerable light on the question of why people remain unemployed even when jobs are available. He is an Institute Professor and a professor of economics emeritus at the Massachusetts Institute of Technology. Diamond is known for his analysis of United States Social Security policy and served as an advisor to the Advisory Council on Social Security in the 1980s and 1990s.
James Manyika is the San Francisco-based director of the McKinsey Global Institute.