Asian growth has benefited greatly from the relatively open international trading system that was built up after World War II. All the East Asian miracle economies pursued export led growth strategies, with the bulk of the exports going to industrial countries in the west.
Hence, some potential negative events may be truly “unknown unknowns” and fall into the realm of uncertainly, not risk, as defined by Knight. In uncertainty, not all possible outcomes and their associated probabilities are known.2 The conclusion from this analysis is that available concepts of systemic risk are vague and too wide to be operationally useful.