Thursday, December 31, 2009


The world has also learned some valuable lessons
that we should already have learned
  • The first lesson is that markets are not self-correcting. Indeed, without adequate regulation
  • The second important lesson involves understanding why markets often do not work the way they are meant to
  • The third lesson is that Keynesian policies do work
  • The fourth lesson is that there is more to monetary policy than just fighting inflation
  • The fifth lesson is that not all innovation leads to a more efficient and productive economy

Regrettably, unless the United States and other advanced industrial countries make much greater progress on financial-sector reforms in 2010 we may find ourselves faced with another opportunity to learn them.

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