Leaders of developed and developing countries all recognize the need for collective action to tame the worldwide recession.
But collective action is easier said than done. Protectionism is tempting as jobs and incomes at home are vanishing.
Topnotch economists, including Federal Reserve chair Ben Bernanke and Barry Eichengreen (University of California, Berkeley), say that mercantilist policies during times of world recession did work. See for example Bernanke’s Essays on the Great Depression (2000) and Eichengreen’s Golden Fetters: The Gold Standard and the Great Depression, 1919-1939 (1992).