The Global Financial Crisis: New Implications and Perspectives for Emerging Economies

The current global financial crisis offers a number of valuable lessons and perspectives. Most importantly, the current crisis shows us that globalization requires more prudential supervision and regulation not less. In other words, the role of governments is critical in this world environment where currency and financial crisis are a recurring phenomenon. Ironically, the institutions we created and conventional economic wisdoms that we have promoted to foster global prosperity have actually ended up tying up our own hands in dealing with many of the pressing issues in the global economy. The global imbalance problem is one prime area where appropriate government intervention could provide a simple solution. The new emphasis on government interventions in managing national and global economy does not suggest going back to the era of protectionism and anti-globalization.