1999 Articles

The East Asian Crisis: Lessons for Today and for Tomorrow: Introduction

Stiglitz, Joseph E.

What I have tried to do in these introductory remarks is to raise questions. I have also tried to put forward the fundamental hypothesis that, in fact - be it in recognizing the causes of the crisis, in predicting the crisis and, most importantly, in responding to the crisis - a lack of basic knowledge about economics and a lack of use of the available knowledge may have contributed to both the inability to anticipate and to deal with the crisis most effectively. The purpose of this conference, however, is not to go over the past - there have been a lot of debates over that; that is not the function. The function is to recognize that, as I said before, we will have crises in the future - no matter what we do, there will be crises - and we will have to face the challenge of how to deal with them. Thus, unless we can answer the kinds of questions that I have posed above, we will not be able to deal with future crises in the way which most effectively maintains the strength of these economies. As we move forward, we must remember that those policies formulated to respond to the crisis - if they have not contributed to aggravate it - have failed to stymie enormous recessions and/or depressions. Even worse, these policies have adversely affected, with disproportionate intensity, the workers and the small businesses who had not engaged in international financial market speculation. These were innocent by-standers who, in some sense, have borne a huge part of the brunt of the adjustment, without having themselves enjoyed any of the fruits of the economic policies that led to the crisis or being party to the packages to respond to the crisis.