Glob­al­iza­tion has yielded many eco­nomic ben­e­fits, but it has also left parts of our world vul­ner­able to the finan­cial mis­steps of one country or region, as seen in Europe’s cur­rent crisis, said Eric Rosen­gren, pres­i­dent and CEO of the Fed­eral Reserve Bank of Boston.

Speaking at an Open Class­room Series event, “The Role of Gov­ern­ment in the 21st Cen­tury,” Rosen­gren said, “We should be con­cerned about what’s hap­pening in Europe because if the Euro­pean sov­er­eign debt crisis gets worse, we are not going to be insu­lated.” More than 100 stu­dents, fac­ulty and com­mu­nity mem­bers attended the dis­cus­sion, held in West Vil­lage F on Wednesday.

The seminar-​​style lec­ture — focusing on the role of gov­ern­ment in the reg­u­la­tion of busi­ness — fell on the same day the Fed­eral Reserve and other cen­tral banks acted to help for­eign banks more easily borrow and lend money, a mea­sure designed to address Europe’s debt crisis.

Rosen­gren said eco­nomic prob­lems tend to occur when assump­tions that seem plau­sible at the time turn out to be very wrong. Sound reg­u­la­tion and smart public and eco­nomic poli­cies, he noted, are crit­ical to solving our cur­rent challenges.

In the second lec­ture of the evening, John Kwoka, the Neal F. Finnegan Dis­tin­guished Pro­fessor of Eco­nomics at North­eastern, explained that gov­ern­ment reg­u­la­tion of Amer­ican industry and busi­ness as a whole typ­i­cally fol­lows a cycle: tight reg­u­la­tion ulti­mately recedes, fol­lowed by the ten­dency for imbal­ance and other issues to take root, leading back to tighter regulation.

He pointed to America’s Great Reces­sion, in which the gov­ern­ment inter­vened when the housing and auto indus­tries were swept up in finan­cial crisis.

Kwoka also com­pared the con­tro­ver­sial gov­ern­ment bailouts of the auto industry and finan­cial insti­tu­tions, which he said have yielded mixed results. The auto industry bailout, he said, was suc­cessful in part because change was strictly enforced and top industry exec­u­tives were removed.

The banks and finan­cial industry, how­ever, received what he referred to as a “soft bailout.”

The incen­tives for bad bank behavior have really not been con­trolled,” Kwoka said. “The struc­ture, the incen­tives and even some of the same per­sonnel remain in place, and I believe it’s pre­dictable that banks and finan­cial insti­tu­tions will do this again.”

Northeastern’s School of Public Policy and Urban Affairs spon­sors the semester-​​long Open Class­room Series, which is free and open to the public.