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Friday, 4 February 2011

Humble Pie

Today, we need to start from scratch, and develop a new economic paradigm. We need a little more humility about the power of policies and markets. We need to better understand the complex linkages between the financial system and the broader economy—and also the linkages between countries themselves. Most important of all, countries need to work together to build a more successful and more stable global economy. This cooperation will be the major legacy of the crisis, and it must not be squandered.
IMF's Dominique Strauss-Kahn on new policies for a new world

1 comment:

  1. Mr. Straus-Kahn is absolutely right about the need for reform in our thinking about the mechanics of economics. Times have changed since the metrics we use today were first introduced. Modern economies are far more complex than they were at the beginning of the Industrial Revolution, which is the time period from which many of our economic theories originate. However, in his press release, Mr. Strauss-Kahn seems to misinterpret our overreliance on this outdated foundation as a failure of overreliance on policy. But the reality is: there can be no overreliance on policy. Whether it is official policy, unground policy, norms, or just plain precedence, these are, necessarily, the forces that shape the economy and its functionality. The goal is the find the best practices and enforce them.

    Overall, however, Mr. Strauss-Kahn has written a great article that sheds a light on the fact that we need to stop looking at economics in a vaccum. It does exist outside of politics, sociology, psychology, or real-world business, and cannot be studied or manipulated without taking a multidisciplinary approach.

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