In 1997, PBS’s “Frontline” interviewed economist Rudi Dornbusch about the disastrous currency crisis that had roiled Mexico a few years earlier. What was surprising, Dornbusch noted, was not that it happened — the trouble had long been predictable, and predicted, given Mexico’s monetary policy. What was surprising was when it happened.
“The crisis takes a much longer time coming than you think, and then it happens much faster than you would have thought, and that’s sort of exactly the Mexican story,” said Dornbusch, who died in 2002. “It took forever, and then it took a night.”
Dornbusch’s observation was the pithiest and most lyrical summation of what analysts feel when watching countries whose policies are driving them toward some seemingly inevitable catastrophe.… Seguir leyendo »