by their successful application by a number of countries. however, the experience of the past two decades also suggests some lessons that augment or modify what we thought we knew about economic development in 1990. i will highlight three specific lessons. first, the implementation of the washington consensus recommendations is important and not so straightforward in practice. in particular, as i alluded to earlier, the sequencing of reforms matters. for example, some developing countries, following the principles of liberalization and deregulation, removed controls on the inflows of foreign capital, and foreign investors responded by pouring in funds. however, the banking systems and the associated regulatory and supervisory agencies in these countries were not always well prepared to manage these capital inflows. consequently, some of the foreign capital was badly invested, which in turn contributed to emerging - market financial crises, like those in mexico and emerging asia in the 1990s. this experience suggests that measures to strengthen banks and bank regulation should be put in place before the domestic market is opened to capital flows from abroad. similarly, dismantling controls on the domestic financial industry has proven counterproductive when important complementary factors – such as effective bank supervision, the availability of bank managers trained in market - based lending, or consumer familiarity with financial products such as credit cards – were absent. for example, korea experienced a mini financial crisis in early 2003, resulting from a massive run - up in household debt. in the wake of policy changes to liberalize and increase competition in domestic financial markets, credit card debt in korea as a share of its gross domestic product more than tripled between 1999 and 2002, as the average number of credit cards for every adult in the country rose from 1 to 3. korea ’ s consumers, lenders, and regulators had little experience with credit cards, and institutional arrangements for sharing data on consumer credit, including credit reports, were inadequate. not surprisingly, at least in retrospect, delinquency rates soared, putting the solvency of a number of the country ’ s major financial institutions at risk. the broader lesson is that institutional arrangements, ranging from accounting rules to regulatory frameworks to tax - compliance tools, must be sufficiently developed to ensure that reforms are successful. fortunately, even in the absence of a clear consensus on how best to sequence and implement reforms, many countries have successfully promoted growth through a slow and pragmatic but continuing process of liberalization. burki and perry ( 1998 ) and rodrik ( 2006 ) are among those

##miceri ( 2024 ), “ the drivers of post - pandemic inflation, ” nber working paper series 32859 ( cambridge, mass. : national bureau of economic research, august ), https : / / www. nber. org / papers / w32859. for the economic effects on the size of fiscal stimuli, see oscar jorda and fernanda nechio ( 2023 ), “ inflation and wage growth since the pandemic, ” european economic review, vol. 156, 104474. see christiane baumeister, gert peersman, and ine van robays ( 2010 ), “ the economic consequences of oil shocks : differences across countries and time, ” in renee fry, callum jones, and christopher kent, eds., inflation in an era of relative price shocks ( sydney : reserve bank of australia ), pp. 91 – 128, https : / / www. rba. gov. au / publications / confs / 2009 / pdf / conf - vol - 2009. pdf ; and andrea de michelis, thiago ferreira, and matteo iacoviello ( 2020 ), “ oil prices and consumption across countries and u. s. states, ” international journal of central banking, vol. 16 ( march ), pp. 3 – 43. for the effects of labor market tightness on price and wage inflation, see olivier j. blanchard and ben s. bernanke ( 2022 ), “ what caused the u. s. pandemic - era inflation? ” nber working paper series 31417 ( cambridge, mass. : national bureau of economic research, june ), https : / / www. nber. org / papers / w31417 ; olivier j. blanchard and ben s. bernanke ( 2024 ), “ an analysis of pandemic - era inflation in 11 economies, ” nber working paper series 32532 ( cambridge, mass. : national bureau of economic research, may ), https : / / www. nber. org / papers / w32532. - 8researchers at the board of governors also find that differences in the pace of disinflation across countries have been largely driven by different trajectories of services price inflation. 13 as shown on slide 5, they find that the dispersion of inflation across countries peaked in 2023 and has been declining since then for headline and core goods,