Joseph E. Stiglitz on the global economic crisis

Joseph E. Stiglitz, Nobel Prize laureate in economics, reflects in the business daily Világgazdaság on the global economic crisis. "The world is sinking into an economic crisis that will probably be the worst in the past 25 years, perhaps even the worst since the Great Depression of 1929. In many respects this crisis was 'Made in America'. ... Those who even before the crisis had major trade deficits and high state debts will suffer more than others. States that haven't fully liberalised their capital and financial markets, like China, will be thankful that they didn't give in to pressure from the US Federal Reserve. ... The old institutions recognised the need for reform but they moved at a snail's pace. They did nothing to prevent the current crisis. Then there's the question of how effectively the response of these institutions will be. ... After the Great Depression it took 15 years and a World War for the world to start working as a team and dealing with the weaknesses of the global financial system that had contributed to the crisis. We can only hope that this time it won't take that long: In view of the deeply interwoven nature of the global economy the cost would simply be too high. ... It has become clear that the economic doctrines on which the current Bretton Woods institutions [the World Bank, International Monetary Fund] are based have failed not only in the developing countries, but also in the core countries of capitalism."

» full article (external link, Hungarian)
More from the press review on the subject » International Relations, » Economic Policy, » Global
All available articles from » Joseph E. Stiglitz

» To the complete press review of Thursday, November 20, 2008