We All Fall Down

Global connectivity spread the financial crisis throughout the world. Early hopes that emerging markets were decoupled were dashed months ago. Connectivity via financial markets, trade and corporate structures provided effective conduits for the credit squeeze and falling demand to invade Asia and Latin America. But what is really different this time is that global synchronicity of the crisis has cut off traditional escape routes. And what is problematic is that synchronicity on policy looks weak because of collective action failures. This crisis could be long and deep.