Post Crisis Lessons for Open Economies: Are They All New?

Magas, István (2012) Post Crisis Lessons for Open Economies: Are They All New? In: China - EU Cooperation for a Sustainable Economy. Corvinus University of Budapest, Budapest, pp. 15-55. . ISBN 978-963-503-497-0

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An earlier, shorter version of this paper was published in Köz-Gazdaság, Vol. 14, 4. 2011. Some of the points and the conclusion have been redrafted reflecting the discussion held in the International Competitiveness Section of the Chinese-European Cooperation for Long-term Sustainability, Nov 10-11, 2011 BCU, Budapest.


This paper will argue that the American economy could and will absorb the recent shocks, and that in the longer run (within a matter of years), it will somehow convert the revealed weaknesses to its advantage. America has a long record of learning from its excesses to improve the working of its particular brand of capitalism, dating back to the imposition of antitrust controls on the robber barons in the late 1800s and the enhancement of investor protection after the 1929 crash. The American economy has experienced market imperfections of all kinds but it almost always has found, true, not perfect, but fairly reliable regulatory answers and has managed to adapt to change, (e. g. Dodd-Frank Act on financial stability). The U.S. has many times pioneered in the elaboration of both theoretical and policy oriented solutions for conflicts between markets and government to increase economic welfare (Bernanke, 2008, p. 425). There is no single reason why it should not turn the latest financial calamities to its advantage. At the same time, to regain confidence in capitalism as a global system, global efforts are indispensable. To identify some of the global economic conflicts that have a lot to do with U.S. markets in particular, we seek answers to global systemic questions.

Item Type:Book Section
Uncontrolled Keywords:Global financial imbalances, International wealth position, Fx-risk exposure, key currencies
Divisions:Faculty of Economics > Department of World Economy
Subjects:Economic policy
International economics
ID Code:1543
Deposited By: Ádám Hoffmann
Deposited On:07 May 2014 08:09
Last Modified:07 May 2014 08:09

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