Meine Welt von morgen: Markus K. Brunnermeier

Was kommt nach der Krise? Die FTD fragt prominente Ökonomen. Heute: Markus K. Brunnermeier. Der 40-Jährige lehrt an der US-Eliteuni Princeton und gilt als einer der weltweit renommiertesten Experten der internationalen Finanzkrise.

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* Welche große Maßnahme würde die Klimakatastrophe am ehesten verhindern?

Die drohende Klimakatastophe ist eine sehr große Herausforderung und es wäre von daher zu risikoreich sich nur auf eine einzelne Maßnahme zu versteifen. Vielmehr sollte man mehrere Maßnahmen parallel ergreifen. Zum einen sollte man mit Steuern und handelbaren Verschmutzungsrechten den zukünftigen CO2 Ausstoß begrenzen und umweltfreundlichere Technologien gezielt fördern, zum anderen sollte man aber auch „Geoengineering-Verfahren“ nicht ausschließen und gezielt erproben. Geoengineering erlaubt einem direkt den Klimawandel zu verlangsamen, in dem man z.B. Wasserpartikel über dem Meer in die Luft sprüht und so den Sonnenlichteinstrahlung verringert. Insgesamt gilt es, das Problem mit mehreren intellegenten Mitteln anzugehen, um rechtzeitig verschiedene Lösungswege zu finden.

 

* Haben die USA als wirtschaftliche Weltmacht ausgedient?

Nein, die USA ist und wird eine bedeutende Weltmacht bleiben. Schon allein wegen der hohen Bildungs-und Forschungsausgaben, wird sie eine treibende Kraft für neue Technologien bleiben. Dies wird verstärkt von der allgemeinen Aufgeschlossenheit der US Bevölkerung gegenüber neuen Technologien, die Weltoffenheit und die sich fortsetzende Einwanderung von hoch motiviertem und hoch qualifiziertem Personal. Sicherlich wird es Rückschläge geben und Asien wird seinen Rückstand abbauen. Das letztere ist aber eine sehr gute Entwicklung und wird wahrscheinlich von Standpunkt künftiger Historiker als eine der größten Errungenschaften unserer Zeit gelten.

 

* Wird China 2020 die wirtschaftliche Weltmacht sein? Oder abgestürzt sein%2

Von Birgit Marschall

Meine Welt von morgen: Hans Peter Grüner

/* Style Definitions */ table.MsoNormalTable {mso-style-name:“Normale Tabelle“; mso-tstyle-rowband-size:0; mso-tstyle-colband-size:0; mso-style-noshow:yes; mso-style-parent:““; mso-padding-alt:0cm 5.4pt 0cm 5.4pt; mso-para-margin:0cm; mso-para-margin-bottom:.0001pt; mso-pagination:widow-orphan; font-size:10.0pt; font-family:“Times New Roman“; mso-ansi-language:#0400; mso-fareast-language:#0400; mso-bidi-language:#04Was kommt nach der Krise? Die FTD fragt prominente Ökonomen. Heute: Hans Peter Grüner (42). Der Ökonom ist Professor für Wirtschaftspolitik an der Universität Mannheim. Zu seinen Steckenpferden zählen unter anderem  Verteilungsfragen. Lesen Sie hier seinen kompletten Antwortbogen in Originallänge:

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* Welche große Maßnahme würde die Klimakatastrophe am ehesten verhindern?

Eine globale Mindeststeuer auf CO₂ Emissionen. Lokale Lösungen verschieben die Nachfrage in Billigsteuerländer ohne deutlich das Gesamtangebot zu begrenzen.

* Haben die USA als wirtschaftliche Weltmacht ausgedient?

Viele finden diese Frage interessant, weil sie denken, ein totalitärer Staat könnte zur führenden Wirtschaftsmacht aufsteigen. Totalitarismus und Wohlstand passen aber auf Dauer nicht zusammen. Die USA kombinieren Pluralismus, freie Märkte, hohe Militärausgaben und weltpolitische Erfahrung. Das Land wird weiter eine zentrale Rolle spielen. Die hausgemachte Ungleichheit ist das politische Hauptrisiko für die USA. Trotz Wirtschaftswachstums realisieren viele Haushalte seit 35 Jahren Mehreinkommen vor allem durch mehr Arbeitsangebot.

* Wird China 2020 die wirtschaftliche Weltmacht sein? Oder abgestürzt sein wie Japan und andere frühere Weltmachtkandidaten?

Wirtschaftlicher Wohlstand wird den Ruf nach politischer Freiheit verstärken. Ungleichheit und ethnische Konflikte sind ein Problem. Das birgt politische Risiken in sich.

* Was ist die radikalste Veränderung, die Sie sich für das Weltwirtschaftssystem wünschen?

Es gibt viele kleine Reformen, die vielen Menschen nutzen würden. Globale Mindeststeuern auf den Verbrauch von Umwelt, bessere Startchancen (93 Millionen Kinder erhalten keine Schulausbildung), der globale Abbau von Korruption, Subventionen, Markteintritts- und Handelsbarrieren, die Absicherung von Eigentumsrechten in Entwicklungsländern mit dem Ziel, die Vergabe von Kleinkrediten zu erleichtern, die bessere Orientierung öffentlicher Ausgaben an den Interessen der Bürger durch geeignete Entscheidungsmechanismen.

* Wäre es besser, die Finanzmärkte wieder ähnlich stark zu regulieren wie in der Zeit vor 1980?

 Es geht um die Richtung der Regulierung: mehr Einfluss der Aktionäre auf das Bankmanagement verhindert Eskapaden. Der Zielkonflikt zwischen Diversifizierung und systemischen Risiken muß in der Regulierung berücksichtigt werden und nicht jede Grösse eines Finanzinstituts ist in Ordnung.

* Welche wirtschaftspolitische Strategie würden Sie dem neuen US-Präsidenten Obama empfehlen?

Eine stärkere Steuerprogression zum Abbau des Defizits ist eine Alternative zur Inflation.

* Steht der Globalisierung in den nächsten Jahren ein großer Rückschlag bevor?

Nein, die Gewinner globaler Märkte sind zu zahlreich. Der Globalisierung der Märkte wird die weitere Globalisierung der Politik folgen. Hier gilt es, die Externalitäten im Finanzsektor und beim Umweltschutz in den Griff zu bekommen, ohne das Subsidiaritätsprinzip aufzugeben.

Meine Welt von morgen: Lars-Hendrik Röller

Was kommt nach der Krise? Die FTD fragt prominente Ökonomen. Heute: Lars-Hendrik Röller. Der Ökonom ist Präsident der European School of Management and Technology (ESMT) und Vorsitzender des Vereins für Socialpolitik. Zuvor war er Chief Competition Economist der Europäischen Kommission. Lesen Sie hier seinen kompletten Antwortbogen in Originallänge:

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* Welche große Maßnahme würde die Klimakatastrophe am ehesten verhindern?

Die langfristige und nachhaltige Förderung von Umwelttechnologie. Deutschland ist hier führend. Darin liegt eine Chance, die es gilt zu nutzen. Wichtig ist dabei, verlässliche staatliche Rahmenbedingungen zu setzen, sodass die Unternehmen – viele davon KMU – Rechtssicherheit haben.

* Haben die USA als wirtschaftliche Weltmacht ausgedient?

Sicherlich werden andere Länder wirtschaftlich stärker werden, was aber nicht bedeutet, dass die USA absolut gesehen zurückfällt.  Die wirtschaftliche Entwicklung wird kein Nullsummenspiel sein. Allerdings werden internationale Abkommen immer schwieriger zu erreichen sein – wie etwa im Klimabereich oder die Doha-Runde. 

* Wird China 2020 die wirtschaftliche Weltmacht sein? Oder abgestürzt sein wie Japan und andere frühere Weltmachtkandidaten?

Weder noch. China wird seinen Platz finden. Die wirtschaftliche Entwicklung wird sich auch in China „normalisieren“. Wichtige Reformen, die Rechtssicherheit für Investitionen und geistiges Eigentum sicherstellen, stehen noch aus.

* Was ist die radikalste Veränderung, die Sie sich für das Weltwirtschaftssystem wünschen?

Einen Agrarmarkt, der das Wort verdient hat. Vom jetzigen System werden weder die EU-Bauern, noch die Entwicklungsländer nachhaltig profitieren. 

* Wäre es besser, die Finanzmärkte wieder ähnlich stark zu regulieren wie in der Zeit vor 1980?

Es geht in der jetzigen Krise nicht um per se mehr Regulierung, sondern um die richtige und effektive Regulierung. Der Regulierungsrahmen aus den 80er Jahren ist für die heutige Zeit nicht geeignet. Insbesondere sollte jetzt nicht überreagiert werden, indem man innovative Bereiche durch Regulation behindert.

* Welche wirtschaftspolitische Strategie würden Sie dem neuen US-Präsidenten Obama empfehlen?

Insgesamt macht die Obama Administration in der Wirtschaftspolitik viel richtig. Meine größte Sorge ist, dass die USA – als Vertreter offener Märkte – protektionistische Maßnahmen ergreift. Ein Beispiel wäre die so genannte „buy amercian“ Klausel.  Ein internationaler Subventionswettlauf wäre zum jetzigen Zeitpunkt fatal für eine wirtschaftliche Erholung und den Erhalt von Arbeitsplätzen weltweit.  

* Steht der Globalisierung in den nächsten Jahren ein großer Rückschlag bevor?

Nein, einen großen Rückschlag sehe ich nicht. Internationaler Handel und Arbeitsteilung sind Bestandteile unseres Wohlstands. Allerdings wird es zu einer Verlangsamung des Weltwirtschaftswachstums kommen.

Meine Welt von morgen: Charles Goodhart

Was kommt nach der Krise? Die FTD fragt prominente Ökonomen. Heute: Charles Goodhart (72). Der Brite ist emeritierter Professor der London School of Economics und war Chefvolkswirt der Bank of England. Er plädiert für flexible Bankenregeln: In schlechten Zeiten sollten die Institute weniger Eigenkapital vorhalten müssen, in guten mehr. Lesen Sie hier seinen kompletten Antwortbogen in Originallänge:

 

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* Has the time of the United States as the world’s leading economic power come to an end? 

No. Europe is not unified.  Japan is going backwards.  China has a long way to go and has political problems.  The US will remain the world’s leading economic power for the foreseeable future.

* In 2020, will China be the world’s economic superpower, or will it have collapsed just like Japan and other former would-be economic powers of the world?

If China can develop from a one party state to a stable democracy, it will eventually become one of the two or three main superpowers.  But this will not happen by 2020.

* What economic policy strategy would you recommend to the new US president Obama?

Pay more attention to reform of the housing market, including housing finance.  Maintain free trade.  Introduce universal health care, while at the same time establishing a credible programme for reducing the fiscal deficit.

* What is the most radical change in our global economic system that you would like to see?

Require all senior bank executives to hold a, non transferable, unlimited liability share in their own bank, until death or three years after leaving the bank, whichever is sooner.

* What sort of major step would most likely prevent the most disastrous effects of global warming?

Impose a varying world-wide tax on oil/gas/coal that adjusts so as to maintain a minimum price on CO₂ usage.

* Would it be better to regulate capital markets as heavily as before 1980 again?

No

* Will globalisation suffer a major setback in the next few years?

Yes.  Regulation will shift towards tougher host country control.

Von Birgit Marschall

Meine Welt von morgen: Norbert Walter

Was kommt nach der Krise? Die FTD fragt prominente Ökonomen. Heute: Norbert Walter (64). Seit 1990 ist er Chefökonom der Deutschen Bank. Walter engagiert sich zudem im Gremium der „Sieben Weisen“ zur Regulierung der europäischen Wertpapiermärkte der EU-Kommission. Lesen Sie hier seinen kompletten Antwortbogen in Originallänge:   /* Style Definitions */ table.MsoNormalTable {mso-style-name:“Normale Tabelle“; mso-tstyle-rowband-size:0; mso-tstyle-colband-size:0; mso-style-noshow:yes; mso-style-parent:““; mso-padding-alt:0cm 5.4pt 0cm 5.4pt; mso-para-margin:0cm; mso-para-margin-bottom:.0001pt; mso-pagination:widow-orphan; font-size:10.0pt; font-family:“Times New Roman“; mso-ansi-language:#0400; mso-fareast-language:#0400; mso-bidi-language:#0400;}

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* Welche große Maßnahme würde die Klimakatastrophe am ehesten verhindern?

Eine internationale Umweltbehörde von der Statur der WHO – unterstützt von einer weltweiten Emission von Umweltzertifikaten.

* Haben die USA als wirtschaftliche Weltmacht ausgedient?

Selbstverständlich nein – der Riese ist nur wegen Drogenkonsums derzeit wegen Entzugs in geschwächter Verfassung. Die Vitalstatistik und das immer noch lernfähige Gesellschaftssystem sorgen ab 2015 für die Renaissance der (einzigen) Supermacht.

* Wird China 2020 die wirtschaftliche Weltmacht sein? Oder abgestürzt sein wie Japan und andere frühere Weltmachtkandidaten?

China wird noch ein Jahrzehnt als die neue Supermacht gehandelt, wird es aber nicht. Umweltprobleme und die dramatischen Folgen der „Ein-Buben-Politik“ machen die Chance auf Weltführung zunichte.

* Was ist die radikalste Veränderung, die Sie sich für das Weltwirtschaftssystem wünschen?

Ich wünsche mir die Familie mit Mann, Frau und Kindern, die Geschwister haben, zurück und eine Welt, die Gott sucht und vielleicht findet – damit klar ist, dass Menschenwürde für niemanden disponibel ist, nicht für die Wirtschaft und nicht für die Medien.     

* Wäre es besser, die Finanzmärkte wieder ähnlich stark zu regulieren wie in der Zeit vor 1980?

 Nein, aber intelligente und effiziente Regulierung auf internationaler Ebene, für alle Geschäfte, die grenzüberschreitend sind. 

* Welche wirtschaftspolitische Strategie würden Sie dem neuen US-Präsidenten Obama empfehlen?

 Keynes, for now, exit from it soon, Hayek’s und Schumpeter‘s Einsichten für die Antwort auf die großen Herausforderungen.

* Steht der Globalisierung in den nächsten Jahren ein großer Rückschlag bevor?

Es steht vor lauter wohlgemeinter Firmenrettungen mit Steuergeld und dem damit verbundenen Protektionismus leider zu befürchten.

Meine Welt von morgen: Augusto de la Torre

Was kommt nach der Krise? Die FTD fragt prominente Ökonomen. Heute: Augusto de la Torre ist Lateinamerika-Chefökonom der Weltbank. Bevor der aus Ecuador stammende Volkswirt nach Washington ging, war er Chef der ecuadorianischen Zentralbank. Zuvor arbeitete er bereits mehrere Jahre für den Internationalen Währungsfonds (IWF). Lesen Sie hier seinen kompletten Antwortbogen in Originallänge und-sprache: Normal 0 21 false false false MicrosoftInternetExplorer4 st1\:*{behavior:url(#ieooui) } /* Style Definitions */ table.MsoNormalTable {mso-style-name:“Normale Tabelle“; mso-tstyle-rowband-size:0; mso-tstyle-colband-size:0; mso-style-noshow:yes; mso-style-parent:““; mso-padding-alt:0cm 5.4pt 0cm 5.4pt; mso-para-margin:0cm; mso-para-margin-bottom:.0001pt; mso-pagination:widow-orphan; font-size:10.0pt; font-family:“Times New Roman“; mso-ansi-language:#0400; mso-fareast-language:#0400; mso-bidi-language:#0400;} Normal 0 21 false false false MicrosoftInternetExplorer4 st1\:*{behavior:url(#ieooui) } /* Style Definitions */ table.MsoNormalTable {mso-style-name:“Normale Tabelle“; mso-tstyle-rowband-size:0; mso-tstyle-colband-size:0; mso-style-noshow:yes; mso-style-parent:““; mso-padding-alt:0cm 5.4pt 0cm 5.4pt; mso-para-margin:0cm; mso-para-margin-bottom:.0001pt; mso-pagination:widow-orphan; font-size:10.0pt; font-family:“Times New Roman“; mso-ansi-language:#0400; mso-fareast-language:#0400; mso-bidi-language:#0400;} Normal 0 21 false false false MicrosoftInternetExplorer4 st1\:*{behavior:url(#ieooui) } /* Style Definitions */ table.MsoNormalTable {mso-style-name:“Normale Tabelle“; mso-tstyle-rowband-size:0; mso-tstyle-colband-size:0; mso-style-noshow:yes; mso-style-parent:““; mso-padding-alt:0cm 5.4pt 0cm 5.4pt; mso-para-margin:0cm; mso-para-margin-bottom:.0001pt; mso-pagination:widow-orphan; font-size:10.0pt; font-family:“Times New Roman“; mso-ansi-language:#0400; mso-fareast-language:#0400; mso-bidi-language:#0400;}

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* Has the time of the United States as the world’s leading economic power come to an end?

The crisis ravaged the most admired financial system in the planet, leading many to believe that the U.S. would be dethroned from its dominant position and the dollar lose its status of international reserve currency.  However, the opposite has happened so far.  The run against the dollar never materialized and the demand for the perceived safety of U.S. assets has surged.  Moreover, the U.S. has shown leadership in managing the crisis compared to other rich economies.  And the global recession revealed the great dependence of the world on the U.S.—i.e., that the U.S. cannot collapse without the world also collapsing.  In the future, the U.S. economy will certainly not wield hegemonic power but will remain as a central pillar of the global system.

* In 2020, will China be the world’s economic superpower, or will it have collapsed just like Japan and other former would-be economic powers of the world?

Neither scenario is likely to happen.  Rather than collapsing, China will continue to increase its importance as a player in global markets and its role in shaping global economic policy, along with other large emerging markets (Brazil, India, Mexico, and Russia).  However, it is unlikely that it will surpass the United States, certainly not in terms of income per capita.  China has a long way to go in reducing poverty and has yet to put in place the necessary reforms to modernize its domestic financial markets, address the rising rural-urban inequality, and create a functional social security system.  It will also need to find a new growth model, one that is less reliant on exports and more on consumer spending.  More fundamentally, China will only become an enduring world economic power by exerting its responsibilities in the world’s government, and that will take time.

* What economic policy strategy would you recommend to the new US president Obama?

The shorter run priority is to restore the U.S. economy to a sustainable (possibly more modest) growth path and rebuild a more prudent financial system.  Beyond that, it is imperative that the U.S. becomes a credible leader in the global effort to deal with climate change.  Education and health care reforms are long overdue, as is a serious debate on immigration policy reform.  The U.S. should remain the uncontested leader in keeping the world economy open.

* What is the most radical change in our global economic system that you would like to see?

Free labour mobility across borders would be a most radical change, and a welcome one, but it may be too much to ask from our nationalistic tendencies.  I would be satisfied with a serious move towards multilateralism and global institutions—the need for collective action on a world-wide scale is increasing inexorably because the social and cross-border implications of individual actions are growing in importance (global warming is a prime example).

* What sort of major step would most likely prevent the most disastrous effects of global warming?

It is critical to achieve a global agreement to drastically reduce world GHG emissions, ideally by the end of 2009 at the UN COP conference.  Climate change is proceeding at an even faster pace than what had been recently predicted by IPCC.  To minimize the risk of catastrophic damages, industrialized and developing countries alike need urgently to start moving towards a low-carbon growth path.  Rich countries must exercise strong leadership to generate incentives for investments in R&D and the adoption of low-carbon technologies as well as to ensure that the global response is equitable–i.e., wealthier countries that have had a greater responsibility in the historical accumulation of GHG in the atmosphere must carry a proportionately greater share of the burden.  To curve emissions in an effective and efficient way, countries should use, according to their circumstances, a combination of carbon taxes, cap and trade systems, subsidies, and regulations.

* Would it be better to regulate capital markets as heavily as before 1980 again?

It makes no sense to consider that alternative.  Markets have developed and changed considerably in the past decades, and regulating them as in the 1980s would be inappropriate.  A more nuanced regulatory system would be needed, in at least three dimensions.  First, regulation should better ensure that financial intermediaries and asset managers act more prudently with the money that is not theirs and do not take advantage of their less informed clients.  Second, regulation should induce financial intermediaries to take more into account the social and systemic costs and implications of their individual actions.  Third, regulation would need to tame the propensity of financial markets to be caught in euphoric moods of exuberant optimism followed by gloomy moods of exaggerated pessimism and panic.

* Will globalisation suffer a major setback in the next few years?

As risk aversion subsides, credit will be re-established, the economic activity will recover and trade and capital flows would pick up.  Hence, globalization should resume.  A major setback in globalization could be possible only if insufficient progress is made towards a stronger architecture of international institutions.

 

Meine Welt von morgen: Daron Acemoglu

Was kommt nach der Krise? Die FTD fragt prominente Ökonomen. Heute: Daron Acemoglu (42), Wirtschaftsprofessor am renommierten Massachusetts Institute of Technology (MIT). Der amerikanisch-türkische Ökonom gilt als eines der bedeutendsten Talente der US-Wirtschaftswissenschaften und forscht zur Entwicklungs- und Wachstumstheorie. Im WirtschaftsWunder finden Sie alle Antworten von ihm in Original-Länge und -Sprache.

 

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* Has the time of the United States as the world’s leading economic power come to an end? 

This is an idea that has been floating around since the beginning of the crisis. But I doubt it.

First, who will replace the United States? Even though the crisis is US-made, it has even more seriously affected developing countries because of their export exposure. European banks and economies have the same problems as in the United States, and there is little evidence that central banks and regulating agencies are taking more decisive action in Europe than in the United States.

Second, when the crisis increased the demand for safe assets, the demand for the dollar and dollar-denominated assets increased, because the market still views US assets as safer than the alternatives, even with all of the trepidations of the Chinese.

Third and most importantly, being the world’s leading economic power is not, and in fact should not be, related to expertise in and depth of financial services. It should be related to the innovation capacity and the technological leadership of a country. The United States has been the world’s leading economic power because it has been at the frontier of many of the most major technologies of the past century. At some level, the past 10 years have been an aberration, where the United States misallocated talent towards relatively unproductive Wall Street jobs away from the dynamic innovative sectors of the economy. Even with all of these distortions, there are many new ideas and products in biotech, nanotechnology, software, hardware, retail delivery, health delivery, and green tech, many being developed in the United States, that will spearhead economic growth during the coming decades. The crisis, at some level, should be a wake-up call for the United States, and should solidify its role as a world economic leader in innovation. This scenario of course leaves the potential danger that Wall Street, because of its political power, will avoid downsizing and start becoming a bigger drag on the US economy. Then all bets are off.

* In 2020, will China be the world’s economic superpower, or will it have collapsed just like Japan and other former would-be economic powers of the world?

Even 10 years is a long horizon for making political predictions and where China will be in 2020 is mostly about politics.

Yes, it can collapse because the political system can collapse or can clampdown further, damaging the great economic potential of this nation. It can become more militaristically aggressive, destabilizing the region and the world. There is even a small probability that China will open up its political and economic system even further, thus unleashing its economic potential to its full extent.

But my guess, a very crude one and one on which I would definitely not wager a bet, would be that in 10 years time China will still be an authoritarian regime and suffering the economic consequences of this political choice. Growth under authoritarian regimes often takes the form of „crony capitalism“ and China is no exception. Crony capitalism can deliver growth for short periods. But it is not the best arrangement for innovation and transition to new technologies, and certainly it’s not the best system for the welfare of the majority of the citizens.

Having said all that, China is still growing and the Communist Party elite still have a firm grip on political power, and the nationalism card is further strengthening their hold on this power. So even if elements of crony capitalism slow down growth in China, the regime need not be destabilized and hence my prediction that politics in 10 years is likely to be more or less where it is in China today. Economically, we should then expect China to grow, but at somewhat more modest rates. Taking into account that the reported growth rates in China are most likely exaggerated (perhaps quite a bit), this means China growing 4 or 5% a year for the next 10 years. This is hardly enough to make China one of the richest countries in the world per capita.

* What economic policy strategy would you recommend to the new US president Obama?

Well I guess it’s too late to make many recommendations. The Obama administration has been very quick in charting its course and implementing policies. I sympathize with many of them, but I see also many mistakes and many danger signs. I’ll mention only the most important ones.

·         I think the stimulus plan was largely wasted. A new one would be a bad idea.

·         The financial system has not been cleaned up properly, and the initiatives taken by the administration, which were almost direct continuations of those started by Hank Paulson, are being effective, but at a relatively high cost. National debt is ballooning and this will become a major problem for the US and the world economy. High national debt will become a break on economic growth in the near future. Policies that will increase indebtedness even further should be avoided.

·         In this light, the tax cuts proposed by Obama and the health care reform, unless managed extremely carefully, could become very costly. The health care reform is something this country badly needs. But the current plans are unclear in their details, and all the details that come out suggest that they will increase the health care spending in the United States even further, and with taxpayer money. This would be a disaster. A nationalized, single-payer health care system with appropriate cost control mechanisms, for example like the one in Germany, would certainly be a system I would support. But there is no evidence that this is where we are heading. Instead, it seems like the health-care reform will be a mixture of the current system, with even less cost control, together with additional government funds to reduce cost control even further.

·         A true and honest environmental policy is also essential. Carbon tax and support for research on new green technologies are important parts of a viable strategy. But the carbon tax has been sacrificed to politics, and replaced by the porkbarrel cap and trade system. The cap and trade system is economically logical, perhaps even preferable to a carbon tax. But at the moment, it is being used as a way of delivering political favors. It is a sad situation.

* What is the most radical change in our global economic system that you would like to see?

I’ll mention two.

1.  More democracy and economic growth around the world. There is so much poverty in sub-Saharan Africa, in parts of South Asia, in Central America, in the Caribbean and in other parts of the world, and the citizens of these nations live not only with few economic resources but also with few civil and political rights. There is nothing inevitable about these outcomes. They can be changed. And yet, change can only start from bottom-up entrepreneurial activities and democratic movements in these countries, but also needs support from the developed world—us. But we still continue to throw foreign aid around the world just to feel good—rather than achieve anything. We still continue to support dictators because they are our „supposed friends“. At the end of the day, the main initiative has to come from the citizens of these countries. All we can do is to encourage and facilitate such a transition.

2. Viable green technologies. Global warming is a real threat and new green technologies will not only help us avoid an unsustainable growth path, but can also act as a platform for future economic growth and innovation, the same role that the silicon chip and computer technologies played over the past 35 years.

* What sort of major step would most likely prevent the most disastrous effects of global warming?

I guess I answered many parts of this question already. In one word: Green technologies. They are feasible and they can become cost effective with further innovation. Carbon tax, or an appropriate cap and trade system, is important in the short run, but is not the long-run solution, because it would ultimately have to reach a high level and would become a break on economic growth. We do not want to sacrifice economic growth; in fact, as I noted above, the world badly needs economic growth in many of its poorest parts. What we want is sustainable economic growth, and this means developing new technologies to break our dependence on fossil fuels.

* Would it be better to regulate capital markets as heavily as before 1980 again?

Yes and no. There have been important financial innovations, reducing the cost of capital for many firms. We do not want to restrict their use or prevent the emergence of new financial innovations.

Moreover, I don’t see any need for regulating private transactions, as long as they do not create systemic risks and misaligned incentives. The problem of the past 15 years has been the combination of lack of regulation, astronomical leverage and implicit and explicit guarantees given by the government and the Fed to financial institutions. Most banks receive explicit subsidies and support from the government because of deposit insurance. Deposit insurance is a crucial part of our financial system and not something we would like to give up. But if there are such subsidies, then they must come with regulation. The other part of the dysfunctional picture were the implicit subsidies because of „too big to fail“ or „politically too connect it to fail“ features of many banks. Combine them with unrestricted leverage, and we have an explosive mix.

Regulation is also needed because of systemic risk, and because of fraud. I don’t think the investment behavior of a wealthy individual through a hedge fund should be regulated. If he or she wishes to invest in risky assets, I do not see any problem with that. But even the wealthiest individual needs some guarantee from the government that the hedge fund is not just running a Ponzi scheme (or should we say a Madoff scheme?) or is just a fly by night operation, getting ready to run to the Cayman Islands. But more important than fraud is systemic risk. Real problems arise if this hedge fund then borrows further from institutions that have deposit insurance in order to make leveraged bets using the money of the wealthy individual as seed funds. Thus leverage, especially leverage coming from institutions that have deposit insurance and other subsidies from the government, is the real problem.

Of course, the type of regulation that I am suggesting can always be blocked by the financial industry if they continue to have as much say in political matters and in their own regulation. So the regulation of finance must go hand-in-hand with the regulation of the politics of finance. The US political system has not passed through the crisis with flying colors to say the least.

Bottom-line: I think we need smart regulation rather than excessive regulation. A big element of this is to limit leverage and deal with systemic risks. Another important part is to make sure that institutions that receive deposit insurance are properly regulated. And perhaps the most important part is the regulation of the political power of the corporations that need to be regulated.

* Will globalisation suffer a major setback in the next few years?

I fear so. But not because of the financial crisis. The biggest fear I have for the future of our world is a setback in globalization, with all of its economic, political and social dimensions, coming from the rise of extremist views. The rise of nationalism and the rise of religious extremism are with us, pure and simple. We are far from the end of history as Fukuyama envisaged. We may be reliving it. There is tremendous amount of extremism in the Middle East and in Pakistan and Afghanistan. But as dangerous is the national extremism breeding quietly (and sometimes not so quietly) in Russia and China, and in other parts of the world.

Europe is not immune to this new tide. European Union’s reaction to the accession of Turkey sadly illustrates the strength of nationalist and religious feelings in Europe, even though most would like to deny them. Greater nationalist and religious extremism will weaken the ties across nations, and globalization will be its first casualty.

This is my fear, but this path is not unavoidable. Advances in communication technology are making the world more and more connected, and perhaps they will overwhelm the rising extremist tide.

Meine Welt von morgen: Kevin O’Rourke

Was kommt nach der Krise? Die FTD fragt prominente Ökonomen. Heute: Kevin O’Rourke, Professor am Trinity College in Dublin. Der irische Ökonom zählt zu den profiliertesten Wirtschaftshistorikern Europas. Im WirtschaftsWunder finden Sie alle Antworten in Original-Länge und -Sprache.

 

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* Has the time of the United States as the world’s leading economic power come to an end? 

No. The United States (and Europe) will decline in relative terms as emerging economies continue to converge on the leaders, but in absolute terms the US will remain the leading economic power for some time.

* In 2020, will China be the world’s economic superpower, or will it have collapsed just like Japan and other former would-be economic powers of the world?

The US will still be the world’s economic superpower in 2020, and for longer than that if your definition of ‘superpower’ includes being at the world technological frontier. As regards China, it should remain capable of substantial growth for some time to come as it transfers labour from low productivity agriculture to higher productivity manufacturing and services, accumulates capital, and imports modern technology. The extent to which that happens depends however on a number of unpredictable factors: the length of the current depression, the future of international trade, and the political stability of China itself.

* What economic policy strategy would you recommend to the new US president Obama?

Like many other political leaders, he needs to be much more decisive in dealing with the banking system than he has been to date. On the other hand, his instinct that dealing with falling aggregate demand requires a coordinated international macroeconomic stimulus seems right to me. One danger we now face is that individual countries’ stimuli will fall short of the mark, since there is only so much that individual countries can do on their own to prop up world aggregate demand; that individual countries will therefore run out of ‘fiscal room’, as the IMF calls it, without having solved the world aggregate demand problem; and that protectionist pressures will consequently rise along with dole queues. Another danger is that not dealing properly with the banking crisis will lead to years if not decades of stagnation.

* What is the most radical change in our global economic system that you would like to see?

There is something perverse about a system geared to consumer wants in the West which are so ephemeral that once a crisis hits, they can be jettisoned with such ease (which is one reason why the downturn is so steep) – while incredibly fundamental individual needs in sub-Saharan Africa and elsewhere, and environmental needs everywhere, remain unmet.

* What sort of major step would most likely prevent the most disastrous effects of global warming?

We obviously need major investments in alternative energy sources and new transportation technologies. A depression would seem like a good time to start investing. Heavy carbon taxes will also eventually be part of the solution.

* Would it be better to regulate capital markets as heavily as before 1980 again?

We need capital to flow from rich to poor countries, but that is of course not the direction in which capital has been flowing, net, in the recent past. As for the two-way capital flows that were supposed to diversify away risk, it seems safe to say that their benefits have been oversold. I think it is very important to keep commodity trade reasonably open, for political as well as economic reasons, but I am much more agnostic about capital flows. If controls help countries to stabilise their economies at a time of crisis, then let them be introduced.

* Will globalisation suffer a major setback in the next few years?

That depends on the actions of policy makers. In the worst case scenario, a prolonged slump and rising unemployment could indeed make it difficult for governments to resist protectionist demands. In the best case scenario, successful international cooperation to deal with the crisis could strengthen our multilateral institutions, in particular making them more representative of the world as a whole. There are also a range of intermediate scenarios with correspondingly uncertain implications. The policies chosen by politicians matter.

Meine Welt von morgen: Raghuram Rajan

Was kommt nach der Krise? Die FTD fragt prominente Ökonomen. Heute: Raghuram Rajan (46). Der aus Indien stammende Ökonom lehrt in Chicago und war von 2003 bis 2007 Chefökonom des Internationalen Währungsfonds. Im WirtschaftsWunder finden Sie alle Antworten in Original-Länge und -Sprache.

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* Has the time of the United States as the world’s leading economic power come to an end? 

No, it is still by far and away the strongest economy in the world, and may be the first to emerge from this recession. But its lead is waning. Moreover, the capacity of action for any government depends not just on the size of its economy, but also on its fiscal situation. Here the crisis may have a serious effect, increasing deficits, and expanding the U.S. government’s debt substantially.

* In 2020, will China be the world’s economic superpower, or will it have collapsed just like Japan and other former would-be economic powers of the world?

I am not sure Japan has collapsed. It certainly did stop growing, but it is still the second largest economy in the world. That said, I take the point that growth need not proceed in a straight line. China is on track to become the world’s largest economy, but its progress needs continued political stability, and a steadily shift from reliance on foreign demand to a reliance on domestic demand. Neither can be taken for granted. However, in sheer economic terms, China will still have a low level of overall per capita GDP when it overtakes the US, and will have the potential for many more years of significant growth.

* What economic policy strategy would you recommend to the new US president Obama?

This is tough in a few lines. I think he needs to bring hope and opportunity to the masses who feel they have missed out on the past decades of growth, even while avoiding an excessive reliance on tax and transfer policies, overregulation, or protectionism that will stultify growth.

* What is the most radical change in our global economic system that you would like to see?

I would like to see more global dialogue to address the problem of global demand. This, in some ways, led to the crisis, and is likely to be with us long after the crisis is over.

* What sort of major step would most likely prevent the most disastrous effects of global warming?

I don’t think there is a silver bullet. We should try a number of things, including taxes on carbon emissions. But I do think that given the consumption levels of the people in industrial countries, and the consumption growth of people in emerging markets and developing countries, there will have to be a shift in the pattern of consumption if we do not have some miraculous technological breakthrough. The rich will have to consume less, while the poor have to be more careful about how they grow consumption. This requires hard choices on all sides.

* Would it be better to regulate capital markets as heavily as before 1980 again?

No. I am not sure the regulators covered themselves with glory this time, so on what basis are we giving them more powers? Moreover, the regulations that were in place before the 1980s were archaic and hence removed. By reinstating them, we may well just set the stage for removing them in the future, when the public is in a less vengeful mood. What we really need are better regulations, more uniformly applied across institutions, and which are enforced more effectively.  

* Will globalisation suffer a major setback in the next few years?

Perhaps, especially if the recession lasts long and countries turn more protectionist.

Meine Welt von morgen: Andreu Mas-Colell

Was kommt nach der Krise? Die FTD fragt prominente Ökonomen. Heute: Andreu Mas-Colell (64). Der Spanier ist Präsident der Graduate School of Economics in Barcelona. Zuvor war er 16 Jahre lang Wirtschaftsprofessor in Harvard. Im WirtschaftsWunder finden Sie die Antworten in Original-Länge und -sprache.

 

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* Has the time of the United States as the world’s leading economic power come to an end? 

 No, it will have a smaller weight quantitatively speaking but I do not see any other candidate for the position of leader. What happens is that to exercise leadership the US will need, in possible contrast with the past, to display policies with which large segments of the world can identify.

 * In 2020, will China be the world’s economic superpower, or will it have collapsed just like Japan and other former would-be economic powers of the world?

The year 2020 is almost around the corner. So, the answer should be no, even if, as I would hope, there is no collapse. On the other hand the current world situation reminds us that every expansion ends at some point. Let’s hope for a soft landing.

 * What economic policy strategy would you recommend to the incoming US president?

 The Obama administration is doing pretty well. Keep it up.

 * What is the most radical change in our global economic system that you would like to see?

Elimination of agricultural protectionism and the setting up of strong, and well endowed with resources, cooperative institutions empowered with the mission to eliminate poverty in the world, and with the ability and the brains to do it intelligently.

 * What sort of major step would most likely prevent the most disastrous effects of global warming?

Two things have to happen: drastic reduction of CO2 emissions and economic development of the less developed world. Both can only happen with a very substantial transfer of resources from the rich to the less rich countries (and this has to be done well). In addition: massive research on energy, including the issues related to the residues of nuclear energy.

 * Would it be better to regulate capital markets as heavily as before 1980 again?

No. There is no way back.

 * Will globalisation suffer a major setback in the next few years?

Not a major setback. Perhaps a minor one. And more concentrated on the financial system than on trade. The experience of 1929 constitutes strong vaccination against protectionism.

Von Birgit Marschall

Meine Welt von morgen: Jean Pisani-Ferry

Was kommt nach der Krise? Die FTD fragt prominente Ökonomen. Heute: Jean Pisani-Ferry (56). Der französische Ökonom lehrt Volkswirtschaftslehre in Paris, berät Frankreichs Präsident Nicolas Sarkozy sowie die EU-Kommission und leitet den Brüsseler Thinktank Bruegel. Im WirtschaftsWunder finden Sie die Antworten in Original-Länge und -sprache.

 

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* Has the time of the United States as the world’s leading economic power come to an end? 

No. True, the crisis originated in the US and confidence in the US economic system has therefore been shaken. It has made the arrogance of the Bush-era unbearable and has accelerated the emergence of a multi-polar world. Even the Clinton-era notion of ‘the indispensable nation’ sounds ironic now.

But the crisis has also confirmed that, for better or worse, developments in the US determine developments in the rest of the world. For all the talks about decoupling, no other country or continent has been able to substitute the US as a driver of world growth. Europe, in particular, has proved once again that in spite of its size and the sophistication of its economy it is not capable of becoming an autonomous growth engine. Seen from Beijing or Mumbai, the world after the crisis is perceived as being more dependent on the US, not less.

* In 2020, will China be the world’s economic superpower, or will it have collapsed just like Japan and other former would-be economic powers of the world?

Neither. China has become the indispensable partner and it is set to become one of the two or three poles of the world economy, together with the US and perhaps with Europe. But its weaknesses are all too apparent and in an unstable world economy, China’s “peaceful rise”, to quote the Chinese concept, is unlikely to be smooth. It has not yet engineered the transition from an export-dependent growth model to a balanced model. Providing jobs to the masses from the countryside remains a huge challenge, the financial system is fragile, demography is awful, and there are permanent tensions between the centre and the provinces, to name just a few challenges. Also, China is not yet ready for the world leadership role called for by the proponents of the G20. So the rise of China is  inevitable but there are likely to be crises and setbacks on the road.  

* What economic policy strategy would you recommend to the new US president Obama?

The short term priorities are clear: to ward off depression and to repair the financial system. The new administration has been acting forcefully on the first front but less on the second one, essentially for political reasons I think.

For the longer term the vision of a better regulated, more multilateral, more environment-friendly US that borrows from Europe some of the traits of the social market economy is welcome. To this, Barack Obama needs to add a framework for fiscal sustainability. If he makes progress on these five fronts, or even only on most of them, he will have produced a policy realignment of historic magnitude. But he has yet to move from vision to policy formulation, let alone implementation, and this has barely begun.   

* What is the most radical change in our global economic system that you would like to see?

A global carbon tax. This would be an unequivocal indication that the international community recognises the intensity of interdependence, and is the best way to ensure that all agents worldwide behave on the basis of the same price signal. Its proceeds could be used to both to stimulate research and investment, and to compensate the poor for the loss of purchasing power. But a global tax would require a level of international cooperation that is unlikely to be achieved.  

* What sort of major step would most likely prevent the most disastrous effects of global warming?

In the absence of a global tax, we need a comprehensive international agreement in which all the major countries take part, even if they do not enter into the same commitments at the same time. This is essential because, if the major emerging and developing countries do not take part in the agreement, the developed countries are likely to resort unilaterally to some form of border measures to maintain the competitiveness of production from their territory. This would give rise to dangerous trade disputes.

A global agreement, while differentiated, will need to go beyond nominal participation of developing countries. There will be a fine balance to strike and that’s what is at stake in the global negotiations this year. 

* Would it be better to regulate capital markets as heavily as before 1980 again?

No. The world of 1980 was fragmented into a series of autarkic national financial systems that were themselves often fragmented into further sub-sectors. Today’s challenge is to make financial globalisation work, that is, to reap the benefits of a global allocation of savings and the diffusion of the best financial technologies, without paying a high price in terms of instability.

This challenge was already apparent ten years ago, after the Asian crisis, but it was ignored. It is now glaringly evident. To make financial globalisation work implies better regulation at global level or at least better coordination. It also requires surveillance of national policies, including those of the great powers. If we do not succeed we may well return to the fragmentation of the 1980s. But at a price, because it would imply less efficiency and tighter constraints on economic development. 

* Will globalisation suffer a major setback in the next few years?

It may. Fortunately, so far governments have avoided resorting to the protectionist option. There have been disputable measures here and there but on the whole priority has been given to cooperation, not stand-alone solutions. Visibly, governments have not forgotten the lessons of the 1930s. But with unemployment and business bankruptcies on the rise in the coming quarters, and as citizens become increasingly angry (and justifiably so), domestic politics will pull them in the opposite direction. Even in the best of cases the financial crisis and the economic crisis will be followed by social and political crises.

So it is not enough to know what not to do. The only way to counter the protectionist risk is to make international cooperation deliver. The good start at the G20 summits in Washington and London needs to be followed by further reforms at the G20 meeting in New York in September and at the UN COP15 climate change meeting in Copenhagen in December of this year. The momentum needs to be kept.

Von Birgit Marschall

Meine Welt von morgen: Philippe Martin

Was kommt nach der Krise? Die FTD fragt prominente Ökonomen. Im WirtschaftsWunder finden Sie die Antworten in Original-Länge und -sprache. Heute: Philippe Martin. Der Franzose ist Professor am Sciences Po-Institut in Paris. Der Makroökonom ist besonders bekannt für seine Forschung auf dem Gebiet der Wirtschaftsgeografie. Hier gibt es den kompletten Fragebogen in Originallänge und –sprache:

 
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* Has the time of the United States as the world’s leading economic power come to an end? 

Not yet as the largest and richest economy of the world and it will take some time before China catches up. However, the time of the United States economic and especially financial model as the lead model has come to an end. Also, after the crisis ends, it is likely that the long term trend growth rate of the US will be lower. This should make it easier for China to catch up.

* In 2020, will China be the world’s economic superpower, or will it have collapsed just like Japan and other former would-be economic powers of the world?

It is likely that China’s exceptional growth rate is going to slow down as its income catches up to the rich countries. I see no reason for a collapse except for a political reversal. However, as China opens up its financial system the likelihood of a financial crisis is high in the next few years.

* What economic policy strategy would you recommend to the new US president Obama?

In the short term, I would recommend to stay the course on the fiscal stimulus. The danger is to believe that the few timid economic green shoots we now observe mean one can reverse the stimulus. This is what was done in the US in 1936 and this led to a fall back into recession.

* What is the most radical change in our global economic system that you would like to see?

A transformation of the main international institutions (IMF, World Bank, WTO) towards the end of the sole leadership of the rich countries. Inclusion of poor countries and emerging economies is essential.

* What sort of major step would most likely prevent the most disastrous effects of global warming?

A “cap and trade” system where polluters receive or buy emission permits, but where the number of available permits falls over time. China has to be part of the process.

* Would it be better to regulate capital markets as heavily as before 1980 again?

No we can’t go back to before 1980 but we have to find new ways to regulate capital markets in ways that into account the financial innovations.

* Will globalisation suffer a major setback in the next few years?

Certainly on international financial flows because this is where the gains are least obvious. On the “real” side, trade of goods and services, the collapse should be temporary except if there is a major political backlash on globalization through protectionism. But I do not see this as very likely.

Meine Welt von morgen: Rick van der Ploeg

Was kommt nach der Krise? Die FTD fragt prominente Ökonomen. Im WirtschaftsWunder finden Sie die Antworten in Original-Länge und -sprache. Heute: Rick van der Ploeg (52). Der Niederländer lehrt an der Universität Oxford und der Universität Amsterdam Volkswirtschaft. Der Makroökonom bekleidete neben seiner Forschungstätigkeit bereits verschiedene Ämter in der niederländischen Politik und erlangte durch Zeitungskolumnen und Fernsehauftritte größere Bekanntheit im deutschen Nachbarland.

 

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* Has the time of the United States as the world’s leading economic power come to an end? 

No, but it will have to share the stage with China and India. Furthermore, it will have to adjust spending and stop living on borrowed money. If not, we can expect further slides in the dollar and fragility of the international financial system.

* In 2020, will China be the world’s economic superpower, or will it have collapsed just like Japan and other former would-be economic powers of the world?

China is and will be a superpower, not only as a big investor in the US and the UK and an exporter of manufacturing commodities but also a major importer of natural resources from Africa and elsewhere. Furthermore, China will not be just exporting low-skill, labour-intensive goods, but will also surprise the world by being a front runner in R&D of new products and creation of new designs. Their universities will be in a few decades the best in the world.

* What economic policy strategy would you recommend to the new US president Obama?

Regulate the financial system: supervision, supervision, supervision. And make you sure people start consuming and firms start investing again with whatever it takes. Obama should try to resist protectionist pressures. 

* What is the most radical change in our global economic system that you would like to see?

Get developing countries on the negotiating tables.

* What sort of major step would most likely prevent the most disastrous effects of global warming?

Curb CO2 emissions and invest much more in clean technology rather than in missiles and defense.

* Would it be better to regulate capital markets as heavily as before 1980 again?

Not necessarily as heavily, but much more effectively.

* Will globalisation suffer a major setback in the next few years?

There is a big danger of an upsurge of protectionism, which should be avoided.

 

Meine Welt von morgen: Ricardo Hausmann

Was kommt nach der Krise? Die FTD fragt prominente Ökonomen. Im WirtschaftsWunder finden Sie die Antworten in Original-Länge und -sprache. Heute: Ricardo Hausmann. Er lehrt Ökonomie in Harvard. In seiner Heimat Venezuela war der Spezialist für Entwicklungspolitik 1992 und 1993 Planungsminister.

* Has the time of the United States as the world’s leading economic power come to an end?

I don’t think so. The crisis has caused a flight to quality which has made the US the only remaining super-borrower, able to mobilize the resources of others, while Eastern Europe and much of the emerging market world is forced into pro-cyclical cutbacks in bad times, because they have lost access to finance. While much of Europe has been financially more careful than the US, it lacks the capacity to respond to crisis and hence is suffering more. East Asia, focused as it is on a growing world market, has been hit much harder than the US. So, while the crisis may have been brewed in the US, the relative standing of the US will not be curtailed.

* In 2020, will China be the world’s economic superpower, or will it have collapsed just like Japan and other former would-be economic powers of the world?

China will definitely not be the world’s superpower by 2020. It will be very hard for China to grow at 8 percent when the global economy will grow at 3 or 4. Export-lead growth is easy when you are small, but not when you are big. Look at Germany. My bet is that China will continue growing but at a slower rate and that it will face a major political and a banking crisis.

* What economic policy strategy would you recommend to the incoming US president?

At this stage, I would not add more noise to the already over-charged policy agenda. Just focus on execution and pray for the best. 

* What is the most radical change in our global economic system that you would like to see?

No silver bullet can fix the world. Africa needs much more governance and I am not sure that elections are the solution. We need a new partnership between the private and public sector in developing countries that is perceived to be legitimate by the rest of society. It is needed to identify opportunities and remove obstacles to economic activity. We need a fully funded IMF and a recapitalized World Bank and regional development banks. We need more liberal migration policies so that people can move out of countries that are not viable.

* What sort of major step would most likely prevent the most disastrous effects of global warming?

A cap and trade regime for carbon, a new electric power system, R&D in technology including solar energy, biofuels, wind and conservation.

* Would it be better to regulate capital markets as heavily as before 1980 again?

No. Regulation needs to be forward looking. You cannot unscramble the eggs. We need a system of regulation that evolves with the markets as the EUREGAP does successfully for food safety standards.

*Will globalisation suffer a major setback in the next few years?

Lets better work to prevent that from happening. Nobody expected August 1914 and when it happened, it was not pretty. Let’s make sure it does not happen again.

Von Ulrike Heike Müller

Meine Welt von morgen: Erik Berglöf

Was kommt nach der Krise? Die FTD fragt prominente Ökonomen. Im WirtschaftsWunder finden Sie die Antworten in Original-Länge und -sprache. Heute: Erik Berglöf (52). Der Schwede ist Chefökonom der Europäischen Bank für Wiederaufbau und Entwicklung. Transformationsökonomien sind Berglöfs Forschungsschwerpunkt.

 
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* Has the time of the United States as the world’s leading economic power come to an end? 

The United States will continue to be the world’s leading economic power for the foreseeable future. The crisis has also shown how important the United States still is for the world economy and for the resolution to the crisis. At the same time the last few years have demonstrated the limits of that power. We are definitely going towards a more multipolar world economically as well as politically.

* In 2020, will China be the world’s economic superpower, or will it have collapsed just like Japan and other former would-be economic powers of the world?

China will become increasingly important. Potentially it could continue growing at similar growth rates as over the last two decades – there are historical precedents such as the Asian tigers – but more likely it will face various constraints, economically, socially and environmentally. How China copes with these constraints will be crucial for the rest of the world.

* What economic policy strategy would you recommend to the incoming US president?

First and foremost, I would hope the new US president would reinforce the commitment of the United States to openness and promotion of global trade. Protectionist pressures, of the more traditional kind as well as new tendencies in the financial sector, will grow to levels we have not seen in decades. An open United States is critical for effective responses to the key challenges of this century.

* What is the most radical change in our global economic system that you would like to see?

There are many radical changes I would like to see globally, but what is more relevant is what can actually be achieved.  At the European level, the crisis has shifted the momentum and there is some hope that we may see a more coordinated approach to regulation and supervision of the financial system. That would be a radical change of tremendous importance, particularly to the countries of Central and Eastern Europe that have been so adversely affected at a vulnerable point in their quest to integrate with the rest of Europe, and this by a crisis largely created elsewhere.

* What sort of major step would most likely prevent the most disastrous effects of global warming?

As the new US administration has demonstrated the economic stimulus packages now adopted by the countries that can afford them can generate an important push for measures to mitigate climate change. Its commitment to a cap-and-trade scheme, and apparent openness to complementary carbon taxes, should also facilitate efforts to find a workable arrangement post-Kyoto.

* Would it be better to regulate capital markets as heavily as before 1980 again?

No. Some additional regulation and, more importantly, better enforcement of existing regulation should be an important part of the new financial architecture, but the levels of regulation pre-1980 are neither desirable nor feasible. The recent proposals from the Financial Stability Forum go some way towards building this new architecture.

* Will globalisation suffer a major setback in the next few years?

Yes, that is unavoidable. We will see a contraction in trade and, most likely, in financial integration, at least in the short term. On the other hand, the economic and financial crisis does bring home that we are closely interconnected, an insight that will be important in the struggle to build institutions and implement policies that can address our common challenges of climate change and access to clean water, energy, and food.