Chapter 17: Global Turbulence and Crisis
17.1 INTRODUCTION This study started by recognising that the world of the policy-maker is complex and that our conventional methods of illuminating that world, as policy analysts, have their limitations. However, the policy world is not only complex, it seems also to have become increasingly turbulent, with the international financial and economic crisis spilling over to affect many areas of public policy. Government leaders acknowledge that conventional methods of policy intervention seem no longer to work; new models of a dynamically interconnected world are needed, so as to anticipate, steer and control this turbulence; but as yet they are lacking. This chapter does not compete with the many accounts that have appeared of the origins of this crisis or the policy reforms that have been proposed. Instead it draws on previous chapters for templates with which to make sense of this new situation and tools for policy-makers to navigate and steer it. 17.2 CREATIVITY AND INNOVATION IN THE FINANCIAL SYSTEM The previous chapter was concerned with the knowledge economy that moved centre-stage in the 1990s and 2000s. The development of the new information technologies had, it seemed, changed the social and economic landscape. The pace of technological and institutional innovation was accelerating, promoting new forms of globalisation and non-inflationary growth. Even so, the ‘dotcom’ bubble of the early 2000s gave warning that the new economy might also bring turbulence. Moreover, policy-makers were all too aware – as our discussion of EU policy indicators has revealed – that the tools at their disposal...
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