Professors Discuss Financial Crisis

The unprecedented level of global interdependence deepened the U.S. recession, but there is light at the end of the tunnel, according to the two professors of economics who lead a discussion on “The Global Impacts of the Financial Crisis” yesterday afternoon.

International Economics Professor Richard N. Cooper said he was surprised by the extent of the damage wrought by the sub-prime mortgage crisis.

“I don’t know of anyone who foresaw the ramifications of the sub-prime crisis through the whole economic system,” he said. “At least until last July, I thought that we could avoid a recession in the United States. All that is gone now.”

Robert Z. Lawrence, a professor of international trade and investment at the Harvard Kennedy School, emphasized the important role that globalization played in spreading the crisis.

“If ever we needed a reminder of how interdependent we’ve become in a global economy, we just need to look at the fact that no countries have been spared,” he said.

Lawrence, however, also pointed out that protectionism is not a viable response for containing the fallout.

“If we think back to the 1930’s, I think there’s little doubt that dramatic increases in tariff in the United States made that depression much deeper, and left a legacy that took us decades to remove,” he said.

Lawrence added that despite the depth of the global recession, he remained optimistic about the decisions that national leaders have made about trade.

“Almost every global leader has pledged to avoid protectionist actions and I think that reflects a change in intellectual mindset,” he said.

The event, organized by the Harvard International Relations Council as part of their “International Relations Week,” attracted only a handful of students to Ticknor Lounge.

The IRC has seven more events planned for Wednesday, Thursday and Friday.