International Markets Need National Rules

The world economy enters this year with more uncertainty (and anxiety) than at any time in recent memory. Although the financial crisis appears to be contained in the US and Europe, its full repercussions will not be clear for some time. The advanced countries are in for the worst economic downturn since the Great Depression. But how long and deep will this recession be, and how badly will it affect emerging and developing nations? We don’t have the answers to these questions in part because the consequences will depend on what actions policymakers take. The right responses will ensure that the world economy can begin to recover by late this year. Poor policy choices, on the other hand, will at best delay recovery and at worst do permanent damage. Here is a list of things to watch for.