Here are the slides I used in the first class, which ran from 4pm to 7pm yesterday. Tell me if anything about them is unclear.
We went in the deep end.
1. The global crisis is having an impact everywhere – including, the students tell me, making conditions harder for microfinance in Africa or India (I asked: how far flung are the implications?).
2. The bank (and other) recapitalizations have helped, but they have also created additional vulnerabilities. We talked a great about what is happening in the eurozone, and the kind of policies which can turn that situation around.
3. And right now the risks for emerging markets are serious. Of course, many of them have sizable reserves and the IMF can help (and is helping). But scale of this change of sentiment and capital movement out of emerging markets and into … mostly the dollar (and US Treasuries in particular) threatens to overwhelm all normal flood barriers.
If you have questions for the MIT students, please post them here. We’ll discuss in class, and get back to you as effectively as possible.