And at the BIS meeting this week there was even talk of a “forest of green shoots” sprouting in China. Current economic conditions around the world, which are characterized by problems in the global banking sector and a sharp global economic contraction, have created tremendous challenges for policymakers. A major challenge is, of course, the dimension the current financial crisis has reached.
On this matter, Professor Edmund Phelps remarks set us in the right direction. The debate is complex in itself: there are those who favor ex ante preventive interventions and those who underscore the importance of a decisive ex post action to mitigate the effects of financial collapse.