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Views from the Center

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Crisis? Not If We Take a Long View (Development Impacts of Financial Crisis)

When you’re done reading today’s news stories about the crisis, take a deep breath. Media coverage is focused on the very short term, as usual. Speculation abounds that we live in a different world now. I’m reminded of portentous claims after the Asian Financial Crisis that “the miracle was over”, claims which look very overwrought in hindsight. In historical perspective, many of the most worrisome recent crises are small bumps on a very long road.

U.S. Financial Crisis Will Mean Slower Growth, Rising Inequality in Developing World (Development Impacts of Financial Crisis)

For many developing countries, the U.S. credit crisis will mean slower growth and rising inequality. The effects will be protracted, and not all will show up at the same time. And the nature and degree of impact will vary widely. Some countries, notably those with extensive foreign exchange reserves and strong fiscal positions, will be much better able to cope than others. But overall the crisis is very bad news for developing countries and especially for the poor.