streeck, new left review 71, sept / oct 2011 or “ the true lessons of the recession : the west can ’ t borrow and spend its way to recovery ”, raghuram rajan, foreign affairs, volume 91, no 3, may / june 2012. tyler cowen ( 2013 ), the great stagnation, ebook, gordon, r. ( 2012 ), “ is us economic growth over? faltering innovation confronts six headwinds ”, nber working paper 18315. bis central bankers ’ speeches it is obvious from these lists of factors that it is hard to disentangle the effects of weak aggregate demand from slow growth in potential supply. population ageing contributes to both. indeed, one may cause the other. for example, anticipating a slowdown in growth potential, households, worried about impending retirement in the face of undeliverable pension and healthcare entitlements, may try and build savings. this will depress demand further. conversely, anticipated weak demand may reduce incentives for corporations to invest in physical and human capital, causing supply potential to grow more slowly. structural reforms, typically ones that increase competition, foster innovation, and drive institutional change, are the way to raise potential growth. but these immediately hurt protected constituencies that have become accustomed to the rents they get from the status quo. moreover, the gains to constituencies that are benefited are typically later and uncertain while the pain is immediate and its incidence clear. no wonder jean - claude juncker, then luxembourg ’ s prime minister, said at the height of the euro crisis, “ we all know what to do, we just don ’ t know how to get re - elected after we ’ ve done it! ” the growth imperative if indeed fundamentals are such that that the industrial world has, and will, grow slowly for a while before new technologies and new markets come to the rescue, would it be politically easy to settle for slower growth? after all, per capita income is high in industrial countries, and a few years of slow growth would not be devastating at the aggregate level. why is there so much of a political need for growth? one reason is the need to fulfil government commitments. as sociologist wolfgang streeck writes, in the strong growth years of the 1960s when visions of a “ great society ” seemed attainable, industrial economies made enormous promises of social security to the wider public. 6 promises have been augmented since then in some countries by politically convenient ( because

at a later time and become honourable customers, the negative label issued by the crib would not give them another chance of reaching formal credit institutions. the inevitable result would be to drive them back to the informal sources of borrowing or to seek political redress. there is no doubt that there could be several willful defaulters in this group who deserve to be blacklisted, but among them the influential ones will seek ways and means of getting back into the system. it is well known that the banks and the credit institutions do not report the full list of borrowers to the crib. it is also no secret that the institutions cherry - pick the borrowers according to the former ’ s preference. the affluent borrowers, multi national companies, large corporates, highly connected borrowers and the banks ’ other preferred customers do not get reported to the crib, even if they default altogether. the credit profiles of the affluent customers will continue to have clean records of regular payments which protect their image. the crib is totally dependent on these institutions for reliable information and given the objective of looking after its client institutions, the crib would fix negative labels on defaulting borrowers. the crib is not in a position to verify or go into details of the operations of any credit institution and establish the class, creed or social status of the customer. it only fix labels according to what is reported by the credit institution. on the other hand, the bank supervision dept. and non - bank supervision dept. of the central bank of sri lanka, within their own regulatory ambit, can detect the non - reporting by institutions to the crib, but these departments are not mandated to share such information with the crib or vice versa. hence, the injustice continues and often some of the deserving borrowers are denied access to credit institutions. in such a situation, how can the crib ensure social justice and equity in terms of public policy? the crib can be fair only if the credit institutions resolve to report on all defaulting customers with no exceptions. this situation clearly indicates that the decision to groom, retain or eliminate a customer rests largely with the bank or the credit institution. the injustice begins when the reporting institutions do not report defaults of all segments of borrowers. the extent to which the banks and credit institutions have done a disservice to some of the deserving borrowers, is known only to the banks and credit institutions themselves. it is in this context that small businesses