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From crisis to recovery Almost 200 years after the French Revolution, the Chinese leader Zhou Enlai was asked once to comment on its historical legacy. His reported reply? “It is too soon to say.” Were he alive today, Zhou might well give a similar response to the question of the impact of the 2008 financial crisis. Even though most OECD countries appear to be out of recession (and just barely in some cases), the impact of the crisis and subsequent downturn is still being felt in high unemployment, squeezed budgets and economic uncertainty. In short, even if the Great Recession may be past, it will go on shaping our economic destinies for years to come. So, the latest in the reader-friendly OECD Insights series comes at a good time. From Crisis to Recovery charts the causes and course of the Great Recession. Crucially, it also explores the many ways in which the crisis will go on casting a shadow across a
host of areas: jobs, pensions, public finances, financial governance and more. Managing the aftershocks of the crisis is already proving a challenge for policymakers, and From Crisis to Recovery offers some useful insights on the choices they face–for example, the need to rebalance budgets without depriving economies of much-needed government spending and the scope to sustain services such as education that underpin long-term growth. There’s a look, too, at how to strengthen governance in the post-recession world, not just in financial markets but in the areas of tax planning and wider business ethics. The authors point to some of the opportunities that may follow in the wake of the crisis, not least in rethinking economics and preventing a return to business-as-usual. “Academics, to be quite frank, sniff an opportunity here–new research, new ideas, new papers,” Tim Besley of the London School of Economics
tells the authors. “In academic circles, there’s a mass of opportunity to investigate new issues and to think about old issues in a new way …” From Crisis to Recovery is a useful contribution to that investigation. ISBN 978-92-64-06911-4
Don’t let the crisis hurt green trade Has the financial crisis strengthened or derailed support for environmental trade policies? Given tentative signs of recovery, the OECD trade experts are urging governments to resist closing their markets, including on so-called green trade. Environmental protectionism could take a number of forms, says Trade and Economic Effects of Responses to the Economic Crisis. Aside from the obvious import barriers and subsidies to reduce costs for domestic industries, “murky” green protectionism may occur when a government adopts policies under the guise of environmental vigilance. Since March 2009, for instance, several countries have supported the development of eco-friendly vehicles for domestic producers, and others have applied “buy
national” provisions to public procurement having to do with investment in renewable energy or green public works products. These provisions are hardly in the spirit of open trade.
including that related to climate change, through multilateral co-operation. ISBN 978-92-64-08844-3
Furthermore, among emerging economies that are only now beginning to develop their own markets for environmental goods and services, there is a suspicion that calls by wealthier countries for ever more stringent green regulations are more aimed at local interests than environmental goals. So far, these protectionist measures appear to be modest, but the perception that globalisation played a role in the crisis may make it harder to roll back restrictive trade measures later on. Trade and Economic Effects of Responses to the Economic Crisis urges countries to avoid such trade tension,
OECD Observer No 281 October 2010
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