Future of American Capitalism

WSJ Blog has interviews of 2 econs on future of American capitalism:

There is one common question on state of US brand of capitalism and both agree that it is going to be discredited.

Has the decade of the 2000s — with the downfall of Enron, the bursting of the Internet bubble and the Great Panic — discredited the U.S. model of capitalism?

Raghuram Rajan: The rhetoric has changed considerably. People don’t say that the U.S. is the place to emulate any more. The U.S. used to be pretty good at giving lectures in the past, so now of course other countries are taking the chance to thumb their nose at them.

Some people are concluding that capitalism doesn’t work. The problem is that they don’t have anything reasonable to replace it with. To say that we needed more regulation is not to say that markets don’t work.

Jeremy Stein: The risk is that the U.S. model will be discredited more broadly than it ought to be. The lesson that we learn is that we need to do certain things to reform financial markets, but we don’t want to throw out the whole model. Our labor markets are less constrained than European labor markets, we have more IPOs per capita than most other countries. A lot of that stuff remains a strength of the United States.

What is the next best alternative? There are no answers. This crisis is making us rethink on nearly everything in economics…

One Response to “Future of American Capitalism”

  1. Interviews to read « Mostly Economics Says:

    […] Interviews of Jeremy Stein and Raghu Rajan (in WSJ) […]

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out /  Change )

Google photo

You are commenting using your Google account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s

This site uses Akismet to reduce spam. Learn how your comment data is processed.

%d bloggers like this: