We are living in a time of great divisions in our societies – between rich and poor, amongst different races and religions, and across fundamental va… - Minouche Shafik

Reciprocity also helps address the old problem of asymmetric adjustment of global imbalances. Suppose a deficit country wishes to contain the supply of credit and build resilience in its financial system by raising the buffer. If a surplus country whose banks are lending to the deficit country reciprocates, its banks should be incentivised to lend less to the deficit economy, and more to their domestic economy. That should increase domestic demand in the surplus country, and hence demand for deficit country exports, reducing the overall level of imbalances.

So, the economy of the future is our choice. We face a classic intertemporal investment problem – incur some investment costs now with high returns later or opt for inaction or not enough action but incur very high costs and risks later. Even if you do not take into account future generations (which makes these arguments much, much stronger), it seems to me the choice is clear. Climate change and biodiversity loss are here, and we are already suffering the consequences. Unlike the Pharaohs, we can overcome this climate change by choosing a different kind of economy for the future.

Like you, I am new to this campus, having started as Columbia’s 20th president in July. And I say as someone who has experienced change once or twice in my life, beginnings are exciting, and hard, and everything in between. They introduce us to new people and ideas, challenge us to adapt to new situations, and open our eyes to new ways of thinking about the world and our place within it.