Nouriel Roubini provides a rundown of the national economies that have weathered the Great Recession pretty well:
All economies have been affected by the crisis, but a combination of policy responses and strong fundamentals has given some countries, especially some emerging market economies, a relative edge. These same strengths could lead the countries I highlight below to perform better as the global recovery begins, even if their growth rates remain well below 2003-07 trends.
What do these countries have in common? One major theme is that they tended to have lower financial vulnerabilities due to more restrictive regulation and less developed financial markets, as well as larger and stronger domestic markets that sustained domestic demand. Moreover, they had the resources to engage in countercyclical fiscal and monetary policies, actions that were not possible in past crises.
With one exception, there's one other common denominator to the countries on Roubini's list -- none of them are big enough to act as a "locomotive" to power the rest of the global economy out of recession.
The obvious exception is China, but I have serious doubts about the sustainability of their fiscal and monetary expansion. As Roubini acknowledges, there's a lot of "asset bubbles, overcapacity and nonperforming loans" going on across the Pacific.
So I'm a bit worried that the lessons drawn from these countries contain a mixture of good (prudent macroeconomic policies) and bad (greater levels of autarky) if implemented by a larger swath of economies. And I'm not sure the good outweighs the bad on a global level.
Am I missing anything?
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