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Jeffrey Brown speaks with economic experts Simon Johnson and Eswar Prasad about the next moves for the G-20 and its members a year after the global economic crisis began.
And more on what came out of the summit now from Simon Johnson of the MIT Sloan School of Management and the Peterson Institute for International Economics — excuse me — and Eswar Prasad of Cornell University and the Brookings Institution.
Welcome to both of you.
ESWAR PRASAD, Cornell University:
A year ago, we all sat here. The problem was to help us get out of the crisis and prevent it in the future. What does Pittsburgh tell you, Eswar, about where we're at now?
Things have changed dramatically in the last few months. At the end of last year, it looked like the world economy was going off a cliff. All the major economies had hit a wall. And now the circumstances have changed, in part, thanks, I think, to the resilience of market economies, but also thanks to these stimulative measures which not only had a direct effect, but because the leaders stood together and said they're going to take action together, I think that had a pretty positive effect on confidence.
So all of that seems to have gotten us away from the edge of the cliff, so we are, in fact, in a much better position right now where we can start thinking about how to entrench the recovery and whether the measures put in place to get the recovery going should be pulled back or not.
All right. So, Simon, before we get to the what's coming, what about that? And you heard Paul talk about the sense that it worked, stimulus worked.
Well, the last G-20 summit, April in London, I think, was successful, exactly the reasons that Eswar said. The governments, these big, powerful governments — and this is 90 percent of the world's economies, in terms of GDP, represented by the G-20. They decided to try and stop the crisis and act together. And I think they did well.
Unfortunately, since April, they've rather been resting on their laurels, to my perspective, and I'm not sure this Pittsburgh summit is really such a great moment, as Paul was saying.
Well, explain. Where does it fall short?
Well, on the kinds of measures that you'd think you would need to prevent this kind of crisis from happening again, for example, around the financial sector. There's been some very good rhetoric, for example, from the White House in the past couple of weeks, but very little in terms of specifics. And I'm afraid what we got today from Pittsburgh was more empty words, which is shocking and I think a little surprising, given where we're coming from.
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