What began as a singular sovereign debt problem in Greece in 2009 quickly spread to the rest of Europe. First Ireland; then Portugal and Spain and Italy. Today—only three years after the first signs of trouble—virtually all Europeans have felt the destructive effects of the euro zone turmoil, and its impact is being felt around the world.
Contagion, a phenomenon where financial tumult in one country or region spreads to another country, is now a fact of life. The globalization of finance has, in many ways, made contagion inevitable. The world has become much more integrated through trade, investors, and banks, and these ties have caused countries’ financial markets to move together more closely during good times and bad. Read More »
MIT Sloan Prof. Yasheng Huang compares China to India, and asks how China’s authoritarian rule contributed to its astonishing economic growth — leading to a big question: Is democracy actually holding India back? Huang’s answer may surprise you.
Yasheng Huang asks us to rethink our ideas about China and other large emerging economies. Lately he’s been asking, Does democracy hinder or promote economic growth? Full bio »
Recently MIT Sloan alumna Judy Lewent was inducted into the Financial Executives International Hall of Fame. A former executive vice president and chief financial officer of Merck, Lewent was recognized for her performance, leadership and integrity as a financial professional who has made significant contributions to the betterment of her organization and profession. The following is an excerpt of her remarks at the event:
“It is a momentous time for finance. As the global economy teeters on the brink, much of the world stands by holding its collective breath. This is, no doubt, a time of great anxiety. That anxiety is shared, not just by 50% of the public or 75% or even 99%. Everyone shares it.
In the last few months, the Occupy Wall Street movement has brought a lot of attention to the finance industry. However, MIT’s Sloan School of Management has been focused on this area for over 40 years. Our finance faculty have been conducting cutting-edge research, and rigorously teaching our students, ensuring that our finance students are prepared—both in theory and practice—to take on the types of leadership roles required in this area, particularly in light of the recent economic crisis.
As the U.S. and Europe teeter on the edge of a devastating double-dip recession, India’s economic boom—once considered a bright spot in an otherwise bleak global financial landscape—is also showing signs of weakness.
The International Monetary Fund recently cut its growth projection for India, warning that the country was perilously close to double-digit inflation. (In the past fiscal year, India’s economy grew 8.5%; before the financial crisis, its growth exceeded 9% for three straight years.) The IMF cited “a drag from renewed global uncertainty” as the main reason for the revision, but that is letting India off easy.