Much of this activity arose from the investment of foreign exchange reserves by countries running large current account surpluses. Some of these reserves were undoubtedly built up as a precautionary measure in light of the financial problems in emerging markets during the late 1990s, while others are attendant to policies of managed exchange rates.
What can be done? Improving, not ending global and European integration But what can we do instead? To answer that, we should first clarify the question. I think the question should really be: How can we harvest the fruits of trade, technological change and a market economy without dividing our societies to a point where social cohesion breaks down?