Lessons can be drawn from past crises – the 1929 krach, the Japanese crisis of the 1990s – for current national economic policies. Policymakers must be aware of the seriousness of liquidity crises that threaten the economy. To avoid them, the financial system must be cleaned up, and fiscal policies supporting economic growth must be developed. There is also a need for international coordination, especially concerning reforms in the financial system, that should address the main dilemma: allowing the free flow of capital or setting barriers against it.

Pierre-Noël Giraud teaches economics at École des Mines ParisTech and Université de Paris-Dauphine. He works on the globalization of businesses and finance, and on sustainable development.

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