Following Larry Sumners Speech in New Delhi"Ramgopal Agarwala, the senior adviser to R.I.S., or the Research and Information System for Developing Countries, quoted Mr. Summers extensively in a proposal that all Asian countries contribute to a fund that diverts money away from United States Treasury bills and into Asian infrastructure.
“If exposure to the United States deficit is not managed well, we cannot rule out a possible global recession, even depression,” said Mr. Agarwala, a former World Bank economist based in China, adding that Asia has a crucial role to play in correcting these imbalances.
The governments of China and India have both announced that they will invest their foreign exchange reserves in new areas, which will divert them from United States Treasury bills.
Subir Gokarn, the chief economist at Crisil, a ratings agency in India, said that Mr. Summers’s remarks about “the race to the bottom, and the adverse effects of globalization” strike a chord in Asia." See also Brad DELong' remarks in his weblog;
http://delong.typepad.com/sdj/2007/04/larry_summers_t.html and the comments there.
