Second, countries and international organizations should strengthen their cooperation and intensify the regulation of the international speculative capital flows. The current financial crisis underscores the necessity of reinforcing the regulation over international capital flows and enhancing their transparency. International organizations and countries concerned should help developing countries to establish a robust early-warning system and guard against attacks from predatory speculation.
First, economic conditions during the policy-relevant period might differ from the average conditions during the observation period. Second, the economy changes in ways that tend to limit the relevance of historical observations for policymaking.