When Zhou Enlai, former Chinese Prime Minister, was asked what he thought of the French Revolution, he said it was too early to say. Historians who take a long view may agree with Zhou Enlai but practical policy makers do not enjoy that luxury. So, let me use the opportunity of this platform to draw out eight big picture lessons of the crisis.
Lesson 1: in a globalizing world, decoupling does not work The crisis challenged many of our beliefs, and among the casualties is the decoupling hypothesis. The decoupling hypothesis, which was intellectually fashionable before the crisis, held that even if advanced economies went into a downturn, EMEs would not be affected because of their improved macroeconomic management, robust external reserves and healthy banking sectors.