Dutch Economist Arnoud Boot on Economic Landscape

Serge Melki/Wikimedia Commons

Earlier this week I attended a talk in Amsterdam by leading Dutch economist Arnoud Boot, professor at the University of Amsterdam and also influential in policy making as member of the advisory council of the Dutch Central Bank and of the (Dutch) Social Economic Council, an advisory body to the Dutch government and parliament. This talk was part of the University of Amsterdam's Food for Thought series, and I will just highlight a few tidbits, which indeed could offer some food for thought on the current economic landscape viewed from a Dutch perspective.

Professor Boot sees two fundamental developments as causes of the ongoing financial crisis and global economic uncertainty: new technology, which has enabled financial institutions to package and trade securities at a pace and in a manner not seen previously, and no longer being able to be fully monitored by regulators. Secondly, the role of China as a production base for the U.S., while keeping the current imbalances in place by investing the proceeds of its exports to the U.S. (and the rest of the world) in U.S. treasuries, rather than investing it in its own country and becoming an independent and wealthy economy. Professor Boot reminded us that over 200 years ago China was seven times richer than the UK, which is clearly not yet the case at the moment. See also about the decline of Imperial China between 1800-1912. He expects the U.S. to remain the leading economy for the next 15 years.

I was surprised that........