As we emerge out of the global crisis, the deepest financial crisis of our time, there are many lessons being drawn. Among the “big picture” lessons is that the real world is not deterministic but that the real world is stochastic. Our analysis and policy judgements should not lose sight of this truism. Let me explain this by drawing an analogy from physics.
Rome is not only the place where the European project came into being, but also the city that gave Europe its first ‘economic and monetary union’, more than 20 centuries ago. Indeed, if Emperor Augustus could be with us today, he would probably ask: ‘What have you guys been doing all this time?