Let’s suppose this crisis turns around: the contagion is stopped, Asian and other emerging market countries begin to grow again; Japan pulls out of recession and begins to contribute with its recovery to recovery of its neighbors; North America and Europe sustain healthy economies. Then the big question is: how to avoid such a costly episode happening again.
The real costs are not monetary; they are disrupted human lives and hopes. Millions of people in emerging market countries are suddenly without jobs, food, basic necessities, children are not going to school, young people are not learning skills, and are facing uncertain futures. We won’t be able to avoid crises altogether.