Joseph E. Stiglitz on answers to the economic crisis

In the daily Világgazdaság Joseph E. Stiglitz, recipient of the Nobel Memorial Prize in Economic Sciences, seeks answers to the global economic crisis: "This global crisis requires a global response, but, unfortunately, responsibility for responding remains at the national level. Each country will try to design its stimulus package to maximize the impact on its own citizens - not the global impact. In assessing the size of the stimulus, countries will balance the cost to their own budgets with the benefits in terms of increased growth and employment for their own economies. Since some of the benefit (much of it in the case of small, open economies) will accrue to others, stimulus packages are likely to be smaller and more poorly designed than they otherwise would be, which is why a globally coordinated stimulus package is needed. … While it is recognized that almost all countries need to undertake stimulus measures ..., many developing countries do not have the resources to do so. … But if we are to avoid winding up in another debt crisis, some, perhaps much, of the money will have to be given in grants. And, in the past, assistance has been accompanied by extensive 'conditions,' some of which enforced contractionary monetary and fiscal policies - just the opposite of what is needed now - and imposed financial deregulation, which was among the root causes of the crisis."

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