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Building knowledge for trade and development

    • Material on monetary and fiscal policy, structural adjustment and stabilization, as well as crises prevention strategies and ad-hoc approaches.
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        Capital-account regimes and the developing countries (English)
        Discussion Paper by G. K. Helleiner, 1997, 26 pages
        Categories: International Financial System, Macroeconomic Policy

        This paper surveys the forms and roles of private capital flows to developing countries in the 1990s and the national and international policy responses to the problems and possibilities it has created. It describes the growth of these flows in the 1990s, and some of their effects in recipient countries. The paper then addresses the question of alternative capital account policies for developing countries, including the rationale and efficacy of various kinds of direct and indirect controls over international capital flows. It then examines the possibility of improving international arrangements, such as the provision of increased liquidity, better procedures for orderly debt workouts, and clarified international regimes.

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        Capital Flows from South to North: A New Dynamic in Global Economic Relations (English)
        Note by South Centre, 2008, 35 pages
        Categories: Globalization and Development Strategies, Macroeconomic Policy

        This Analytical Note looks at the new dynamic of capital flows from the South to the North arising from unprecedented levels of capital reserve accumulation by the South. It looks at some of the reasons for such capital accumulation - pointing to the perceived need by developing countries to self-insure themselves against financial crises. It then looks at various ways in which financial crises could be prevented by developing countries and concludes by stressing the need for this new dynamic to be reflected in both international economic arrangements and in terms of ensuring that developmental gains by developing countries are obtained.

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        Central Banking, Financial Institutions and Credit Creation in Developing Countries (English)
        Discussion paper by Dullien, Sebastian/UNCTAD, 2009, 42 pages
        Categories: Globalization and Development Strategies, Macroeconomic Policy, VI Members Research

        This paper examines how developing countries can embark on a sustained path of strong investment, capital accumulation and economic growth without capital imports. It is argued that the key lies in the Keynesian-Schumpeterian credit-investment nexus: Given certain preconditions, the central bank can allow a credit expansion which finances new investment and creates the savings necessary to balance the national accounts. It is further argued and confirmed in empirical data that one of the biggest impediments to such a process is formal or informal dollarization which limits the policy scope of the central bank. Moreover, a stable banking system with a broad outreach as well as a low degree of pass-through between the exchange rate and domestic prices seem to be a necessary condition for this process to work.

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        Coordinating Public Debt Management with Fiscal and Monetary Policies: an Analytical Framework (English)
        Working paper by Togo, Eriko /World Bank, 2007, 37 pages
        Categories: Finance for Development, Macroeconomic Policy

        This paper proposes a sovereign asset and liability management framework for analyzing the interrelationships between debt management, fiscal and monetary policies. It illustrates the consequences of uncoordinated policy mix and extends Sargent and Wallace (1981 and 1993) by including debt management. Examples of policy games played by fiscal, monetary, and debt management authorities reinforce the importance of policy separation and coordination to prevent domination by one authority over another which could lead to inconsistent policy mix.

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        Corporate Governance in the Wake of the Financial Crisis (English)
        Report by UNCTAD, 2010, 184 pages
        Categories: Macroeconomic Policy

        The global financial crisis brought the international financial system to a grinding halt: the sudden withdrawal of global liquidity led to a catastrophic downturn in the global economy, which was only arrested by the swift and coordinated intervention of governments on a giant scale. The impact of the crisis has been colossal. UNCTAD’s analysis of the causes of the global financial crisis points to regulatory weaknesses at the national and international levels, but also to poor corporate governance practices as implicated in the risk management standards prevailing in many large financial institutions. It is increasingly recognized that many of these governance weaknesses also apply to other companies. Consequently, on-going corporate governance reforms in many jurisdictions apply not only to the financial sector but to other companies in general.

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        A Cross-Country Analysis of Public Debt Management Strategies (English)
        Working paper by Melecky, Martin /World Bank, 2007, 42 pages
        Categories: Finance for Development, Macroeconomic Policy

        This paper analyzes results of a survey on debt management strategies conducted by the Banking and Debt Management Department of the World Bank. The analysis focuses on (1) whether a public debt management strategy exists in a given country, (2) whether it is made public, and (3) in which form it is imparted. The paper analyzes the distribution of the latter characteristics over different regions, income groups, and levels of indebtedness using graphical analysis. Using regression analysis, it investigates the extent to which basic economic factors can explain the characteristics of public debt management strategies across countries.

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        Development Dimensions of Intellectual Property in Nepal (English)
        Report by UNCTAD, 2016, 59 pages
        Categories: Enterprise Development, Globalization and Development Strategies, Macroeconomic Policy

        Divided in 5 parts, this report on the development dimension of intellectual property rights (DDIP) was developed in response to a technical assistance request from Nepal. Part 1 outlines the major framework for intellectual property (IP) policy in Nepal. Part 2 recommends a number of legislative, policy and practical steps to facilitate and enable the technological and innovation functions of IP protection. Part 3 examines the access to medicine regime of Nepal and recommends for Nepal to implement the transition period for the protection of pharmaceutical product patents and pharmaceutical test data that lasts until 2033. Part 4 analyses Nepal's access and benefit sharing regime, the interface between IP and biodiversity, and options for defensive and positive protection of genetic resources (GRs) and traditional knowledge (TK). The recommendations of this report have legislative and institutional dimensions that require capacity building, and in some cases, additional studies to develop specific action plans for implementation.

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        Development Policies and Income Inequality in Selected Developing Regions, 1980–2010 (English)
        Discussion paper by Giovanni Andrea Cornia, Bruno Martorano, 2012, 52 pages
        Categories: Macroeconomic Policy, Trade and Poverty

        The paper discusses the income inequality changes which have taken place in a few representative developing regions during the last 30 years. While inequality rose in the majority of the countries of these regions in the 1980s and 1990s, the last decade was characterized by a bifurcation of inequality trends. This divergence offers the possibility to contrast the experience of virtuous regions (Latin America and parts of East and South-East Asia) and non-virtuous regions (the European economies in transition and China) so as to draw useful lessons. Since the global economic conditions affecting inequality in these countries were not too dissimilar and since no major variations in endogenous factors were evident across the regions analysed, the difference in inequality trends between virtuous and non-virtuous regions was most likely due to institutional factors and public policies. An econometric test confirms that the reduction of inequality is possible even under open economy conditions if a given set of appropriate macroeconomic, labour, fiscal and social policies is adopted by governments.

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        Do Remittances Reduce Vulnerability to Climate Variability in West African Countries? Evidence from Panel Vector Autoregression (English)
        Discussion paper by Couharde, Cécile, Davis, Junior, Generoso, Rémi, 2011, 31 pages
        Categories: Finance for Development, Macroeconomic Policy, Migration and Development

        In this paper, we empirically examine the role of remittances in smoothing the GDP fluctuations induced by precipitation variability and both meteorological and natural shocks. To this end, we use a panel VAR to empirically study six West African countries from 1983 to 2009. Our evidence suggests that remittances are an important element of macroeconomic stability especially for those countries most vulnerable to precipitation variability. The estimated orthogonalized impulse responses show on one hand, that meteorological shocks and declining precipitation have both adverse consequences on GDP per capita. On the other hand, remittances are characterized by counter-cyclical patterns in cases of precipitation variability and climate shocks. Remittances inflows in the selected countries (countries of emigration) are also heavily dependent on economic shocks in host countries.

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        Economic and Social Survey of Asia and the Pacific 2010: Sustaining Recovery and Dynamism for Inclusive Development (English)
        Report by ESCAP, 2010, 252 pages
        Categories: Macroeconomic Policy, Regional and Bilateral Trade Agreements

        The Asia-Pacific region leads the process of recovery from the global financial and economic crisis and emerges as a focus of global growth and stability. However, the recovery of the world economy at large remains fragile. This poses risks for sustained recovery in Asia as well, given its export dependence. A more balanced recovery is needed and this will require more globally concerted policy efforts. In this regard, the 2010 Economic and Social Survey of Asia and the Pacific provides a comprehensive analysis of the challenging policy landscape and offers recommendations for the way forward. In the aftermath of the crisis, we see clear momentum for regional economic cooperation.

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        Economic and Social Survey of Asia and the Pacific 2010: Year-end Update
        Report by UNESCAP, 2010, 48 pages
        Categories: Macroeconomic Policy, Regional and Bilateral Trade Agreements

        2010 has seen an impressive recovery of the Asia-Pacific region from the Great Recession of 2008/09. Led by the large economies of China and India, output growth in the region rebounded in 2009 and gathered further strength in 2010. But the region is faced with a weakening of growth in the developed economies which are grappling with a combination of weak household demand and fiscal retrenchment. The Year-end Update of UN-ESCAP’s annual flagship publication, Economic and Social Survey of Asia and the Pacific 2010, considers the implications of these challenges for policy-makers in the region. The principal message of the Update is the need for the countries in the region to adopt a cautious approach in ending of fiscal stimulus packages while building in the medium term alternative sources of demand in the region, both domestic and external. For the former, the Update looks to reduce poverty and boost demand combined with more investment in infrastructure. For the latter, it highlights the need to deepen regional integration in the areas of trade and finance and more broadly in policy coordination in order to face the challenges confronting the region in 2011 and beyond. Management of capital flows is another important challenge for the region’s policy makers for maintaining financial stability.

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        Economic Policy Challenges in an Open Economy: Coherence between Trade and Finance (English)
        Presentation by Heiner Flassbeck, UNCTAD, 2004
        Categories: Competitiveness, Macroeconomic Policy

        What: This paper emphasizes the importance of understanding competitiveness from the perspective of interdependence and analyses its applicability to developing countries. It explores the possibility and policy implications of using currency undervaluation as a general solution to maintaining competitiveness. Who: Can be used for a course on competitiveness. How: For a course on competition and competition policy in developing countries.

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        Economic Report on Africa 2005 - Overview: Meeting the Challenges of Unemployment and Poverty in Africa (English)
        Summary by UNECA, 2005, 24 pages
        Categories: Macroeconomic Policy, Trade and Poverty

        What: The Economic Report on Africa (ERA) is the flagship publication of the UN Economic Commission for Africa (UNECA) based in Addis Ababa, Ethiopia. The 2005 edition shows that despite record economic growth in Africa, poverty is actually getting worse. The report focuses on four key challenges for Africa in the fight against unemployment and poverty: structural transformation to break away from the under-utilization of rural labour, addressing widespread youth unemployment, harnessing globalization to create decent jobs, and creating an enabling environment for the fast expansion of private sector jobs through increased investments. The report stresses that it is up to governments to transform African economies, particularly by taking advantage of opportunities presented by globalization. How: Background reading on Africa's recent performance and on unemployment and poverty in the African context. Who: Policy makers, researchers and lecturers dealing with African economic development.

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        Economic Report on Africa 2006: Capital Flows and Development Financing in Africa (English)
        Report by UNECA, 2006, 220 pages
        Categories: Finance for Development, Macroeconomic Policy

        What: The Economic Report on Africa (ERA) is the flagship publication of the UN Economic Commission for Africa (UNECA) based in Addis Ababa, Ethiopia. The 2006 edition of the ERA places capital flows at the centre of the debate on development financing and examines how external capital can help countries accelerate growth and reduce poverty. Main recommendations include: promoting regional financial integration, establishing mechanisms for monitoring and managing capital flows to minimize the risks of financial instability, designing strategies to increase the contribution of the Diaspora to economic development, and development partners should honour their commitments with regard to the Monterrey Consensus. ERA 2006 points out that with appropriate capital management strategies, African economies could absorb higher external capital with minimal adverse effects. How: Background reading on Africa's recent performance and on financing for development in the African context. Who: Policy makers, researchers and lecturers dealing with African economic development.

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        Economic Report on Africa 2006: Capital Flows and Development Financing in Africa - Overview (English)
        Summary by UNECA, 2006, 30 pages
        Categories: Finance for Development, Macroeconomic Policy

        What: The Economic Report on Africa (ERA) is the flagship publication of the UN Economic Commission for Africa (UNECA) based in Addis Ababa, Ethiopia. The 2006 edition of the ERA places capital flows at the centre of the debate on development financing and examines how external capital can help countries accelerate growth and reduce poverty. Main recommendations include: promoting regional financial integration, establishing mechanisms for monitoring and managing capital flows to minimize the risks of financial instability, designing strategies to increase the contribution of the Diaspora to economic development, and development partners should honour their commitments with regard to the Monterrey Consensus. ERA 2006 points out that with appropriate capital management strategies, African economies could absorb higher external capital with minimal adverse effects. How: Background reading on Africa's recent performance and on financing for development in the African context. Who: Policy makers, researchers and lecturers dealing with African economic development

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        Eight Strategies for Development in Comparison (English)
        Article by Jan Priewe, 2015, 42 pages
        Categories: Globalization and Development Strategies, Macroeconomic Policy, VI Members Research

        The article provides a broad-based overview on competing development strategies and the economic performance of developing countries, mainly since the year 2000. Four traditional mainstream development strategies are discussed (Washington Consensus, neo-liberalism, “good governance” and MDGs) and three long-debated key strategic issues are reconsidered (inward or outward development with export-led growth, industrialisation or growth with predominant primary goods exports, foreign aid-based development). A heterodox approach to development with a focus on macroeconomic policies and structural change is added and discussed in more detail. Implicitly, this lays the groundwork for a macroeconomic theory of development.

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        Ensuring Gender-sensitive Implementation Of The Post-2015 Development Framework
        Policy brief by UNCTAD, 2015, 4 pages
        Categories: Macroeconomic Policy, Policy Reviews and Briefs, Trade and Gender

        This policy brief offers stakeholders (government, civil society) some suggestions on elements and data that may help them to assess whether they are implementing the Post-2015 development framework in a gender-sensitive manner. The suggestions are linked to the proposed goals, targets and indicators and are meant to guide the implementation process once the post-2015 «package» is agreed upon by member States. While gender equality should be promoted throughout the goals, this brief offers suggestions on SDGs 1, 2, 5 and 17, the goals that are intimately related to the role of women as economic agents.

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        EU Financial Market Reform: Status and Prospects (English)
        Case study by Dullien, Sebastian; Herr, Hansjörg/ HTW, 2010, 19 pages
        Categories: International Financial System, Macroeconomic Policy, VI Members Research

        The financial and economic crisis has made it clear that the financial markets are in need of far-reaching reform and more effective regulation. Since the most pressing dangers have been averted and the economy in most industrialised countries is clear of recession, however, the topic of financial market regulation has largely disappeared from the public gaze. Having said that, a great deal is happening in the background with regard to financial market regulation, including at the EU level. Against this background, economists Sebastian Dullien and Hansjörg Herr present the current state of the debate in some of the most important areas of EU financial market regulation and ongoing legislative processes and evaluate the most important plans. The authors come to the conclusion that, although the current deliberations on reform are going in the right direction, they are insufficient to ensure the long-term stability of the EU financial system.

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        Euro Zone Debt Crisis: Scenario Analysis and Implications for Developing Asia-pacific (English)
        Working paper by ESCAP, 2012, 31 pages
        Categories: International Economic Law, Macroeconomic Policy, Trade and Poverty

        The ongoing euro zone debt crisis creates an undesirable scenario for the global economy as well as for the Asia-Pacific region given that the region has close economic linkages. The paper aims to provide quantitative estimates of the potential impact of the euro zone debt crisis on merchandise exports as well as on economic growth and poverty reduction efforts in the region. The results indicate that a one-percentage-point fall of output growth of the euro zone would result in a total export loss of $166 billion. In addition, the protectionist threats could further increase the loss in exports by $27 billion. On social development, the disorderly euro zone debt crisis scenario would prevent 8.19 million people to get out of poverty and another 1.15 million would be pushed back into poverty as per the $1.25-a-day poverty line. The paper illustrates that macroeconomic policy space appears adequate in most economies that tend to be more heavily affected by the euro zone debt crisis. But strong inflationary pressures and less favourable public debt conditions could prevent some economies from implementing swift and forceful macroeconomic policy responses.

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        The Exchange Rate: Economic policy tool or market price? (English)
        Discussion paper by Heiner Flassbeck, UNCTAD, 2001, 52 pages
        Categories: Macroeconomic Policy

        There has been broad consensus among economists for decades that changes in the value of money over time cannot be used as an economic policy tool because people would quickly learn to adapt to any attempt to exploit the money illusion by inflationary policy. Paradoxically, the majority of economic analyses have never questioned the ability of policy makers to exploit money illusion over prolonged periods of time if the subject is the change in the value of money in space, i.e. exchange rate changes. The paper argues that the latter have to be treated in the same way as the former if economic theory is to be consistent. As a consequence, exchange rate changes can only be used to compensate for inflation differentials between countries, and nothing else. The paper draws on the European experience up to monetary union, as well as on experience in developing countries with different exchange rate regimes.

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        Exchange Rates, International Trade and Trade Policies (English)
        Article by Alessandro Nicita, 2013, 30 pages
        Categories: Macroeconomic Policy, Trade Policy Analysis and Trade Data Sources

        This paper analyses the impact that exchange rate volatility and misalignment have on trade and whether exchange rate misalignments affect governments’ decisions on trade policies. It also shows that trade policy is used to compensate for some of the consequences of an overvalued currency, especially anti-dumping.

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        Export Structure and Economic Performance in Developing Countries: Evidence from Nonparametric Methodology
        Discussion paper by Sudip Ranjan Basu, Monica Das, 2011, 59 pages
        Categories: Macroeconomic Policy, Trade Policy Analysis and Trade Data Sources

        This paper offers a closer look of the impact on institutional quality, human capital on GDP per capita for various country-groups in the core model. It provides evidence that a flow of credit and well function financial markets are essential to support higher level of economic performance.The results of the shown nonparametric model support the higher level of skill and technology intensive manufactures and the positive impact they have on GDP per capita in developing countries.

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        Facilitating Biotrade in a Challenging Access and Benefit Sharing Environment (English)
        Report by UNCTAD, 2016, 45 pages
        Categories: Enterprise Development, Macroeconomic Policy

        With the entering into force of the CBD Nagoya Protocol on Access to Genetic Resources and the Fair and Equitable Sharing of Benefits Arising from their Utilization, there is a new opportunity to improve the synergies for access to genetic resources and benefit sharing (ABS) in the context of BioTrade, and in turn contribute to legal certainty on this particularly important matter in regards to sustainable use of biodiversity. Though historically BioTrade has moved in the realm of sustainable biodiversity businesses, particularly with biological resources and certain ecosystem services, questions remain regarding when and how genetic resources become part of BioTrade and most importantly, whether ABS policy and legal frameworks are applicable or not. The Nagoya Protocol on Access and Benefit Sharing is a new multilateral environmental agreement under the CBD, seeking to clarify definitions, issues of scope and coverage of ABS, and specific actions by user and provider countries of biodiversity resources. The rapid implementation of the Protocol within the European Union and Switzerland is placing considerable pressure on providing countries to adjust, develop and implement effective and efficient ABS frameworks at the national level to be consistent with the Protocol and also benefit from it.

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        Financial Liberalization and Economic Policy Options: Brazil 1994-2003 (English)
        Presentation by Maria Alejandra Caporale Madi, 2004
        Categories: Finance for Development, Macroeconomic Policy

        What: The paper focuses on the consequences of financial liberalization and recessive macroeconomic adjustment in Brazil covering the period from 1994 to 2003. The orthodox therapy has proved to create a "financial trap", reinforcing the inability to achieve sustainable economic development. Emphasis is given to the crucial economic issues in the agenda of President Cardoso (1995-2002). Finally, the continuity of the "financial trap" after President Lula's election and the challenges to develop a long-term financial system are discussed. Who: Relevant for anyone teaching or studying financial liberalization and its consequences in Brazil. How: Can be used for a background reading as a case study on financial liberalization.

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        The Global Economic Crisis: Systemic Failures and Multilateral Remedies (English)
        Report by UNCTAD, 2009, 80 pages
        Categories: International Financial System, Macroeconomic Policy

        The report highlights three specific areas (financial deregulation, large-scale financial investors, currency speculation)in which the global economy experienced systemic failures and proposes measures to address them. While there are many more facets to the crisis, UNCTAD examines here some of those that it considers to be the core areas to be tackled immediately by international economic policy-makers because they can only be addressed through recognition of their multilateral dimensions.

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        The Global Economic Crisis: Systemic Failures and Multilateral Remedies - Executive Summary (English)
        Report by UNCTAD, 2009, 18 pages
        Categories: International Financial System, Macroeconomic Policy

        The report highlights three specific areas (financial deregulation, large-scale financial investors, currency speculation)in which the global economy experienced systemic failures and proposes measures to address them. While there are many more facets to the crisis, UNCTAD examines here some of those that it considers to be the core areas to be tackled immediately by international economic policy-makers because they can only be addressed through recognition of their multilateral dimensions.

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        IMF Policies for Financial Crises Preventions in Emerging Markets (English)
        Discussion paper by Lorenzo, Fernando; Noya, Nelson, 2006, 32 pages
        Categories: Emerging Economies and South South Cooperation, International Financial System, Macroeconomic Policy

        In emerging markets, policies for preventing and managing financial crises should be understood following the standard open economy macroeconomics text treatment. This, however, will prevent us from fully comprehending how to deal with these crises. To deal with financial crises in emerging markets, this paper brings about more promising theoretical tools borrowed from the interdisciplinary field of optimal policy design. It also considers the possibility that more than one market failure may occur simultaneously. The theoretical tools discussed here should serve to improve existing prevention and management policies. Admittedly, the interdisciplinary field of optimal policy design is comparatively young, thus offering scarce empirical support for disentangling competing models. Given this inability to decide upon the best possible model, we should consider at least two constraints that policy makers will deal with in the real world of financial crises. First, given that policy makers make crucial choices between parsimonious and innovative measures, this paper recommends parsimony because of the uncertainty about the true model. Second, high political implementation costs will always be present, and these are positively correlated with supranational institutional requirements. Considering issues of both parsimony and political constraints, we argue that any attempt to internationally harmonize rules and codes must be done with caution. With this framework in mind, we review some of the recent proposals about emerging markets crisis prevention. From the point of view of emerging countries and creditor countries taken as a Whole, and benevolent IFIs, we conclude that promoting GDP indexed sovereign bonds is the best available proposal for crises prevention. In this paper, we leave aside the debate of the political economy or governance reform issues of the IFIs.

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        Instruments of Monetary Policy In China and Their Effectiveness: 1994-2006 (English)
        Discussion paper by Geiger, Michael/UNCTAD, 2008, 52 pages
        Categories: Macroeconomic Policy

        China’s monetary policy applies to two sets of monetary policy instruments: (i) instruments of the Central Bank (CB), the People’s Bank of China (PBC); and (ii) non-central bank (NCB) policy instruments. Additionally, the PBC’s instruments include: (i) price-based indirect; and (ii) quantity-based direct instruments. The simultaneous usage of these instruments leads to various distortions that ultimately prevent the interest rate channel of monetary transmission from functioning. Moreover, the strong influences of quantity-based direct instruments and non-central bank policy instruments bring into question the approach of indirect monetary policy in general.

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        Key Economic Developments and Prospects in the Asia-Pacific Region 2008 (English)
        Report by UNESCAP, 2008, 40 pages
        Categories: Globalization and Development Strategies, Macroeconomic Policy

        This report is the third publication in an annual series that reviews the region's economic performance and highlights the strengths and weaknesses of economies in the region. For example, the developing economies in the Asian and Pacific region are estimated to have grown over eight per cent in 2007. The economic powerhouses of China and India continue to drive regional growth,with added impetus coming from the fast-growing Russian Federation. It then identifies the key policy issues and challenges likely to confront Governments in the near term, and provides policy options and recommendations that would help Governments to address these challenges effectively.

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        Key Indicators and Trends in Trade Policy 2016 (English)
        Report by Nicita, Alessandro/UNCTAD, 2016, 35 pages
        Categories: Globalization and Development Strategies, Macroeconomic Policy, Regional and Bilateral Trade Agreements

        This volume of Key Indicators and Trends in Trade Policy 2016, subtitled ‘G20 Policies and Least Developed Countries’ Export Performance’, analysis the outcomes of policies on least developed country growth strategies. It highlights trends in the use of trade policy instruments, movements in exchange rates, the application of sanitary and phytosanitary measures, the use of defensive trade mechanisms, and regional and bilateral economic integration. In describing the measures such as tariffs, antidumping, import restrictions, and preferential trade agreements, the report analysis these by country and region. This report is structured in two parts. The first part presents an overview of the effects of G20 policies on LDCs exports. The second part discusses trends in selected trade policy instruments including illustrative statistics. The second part is divided in five chapters: tariffs, trade agreements, non-tariff measures, trade defense measures, exchange rates and trade costs. Trade trends and statistics are provided at various levels of aggregation illustrating the use of the trade policy measures across economic sectors and geographic regions.

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        Key Indicators and Trends in Trade Policy 2016: a Bad Year for World Trade (English)
        Report by UNCTAD/DITC/TAB/2016/3, 2016, 30 pages
        Categories: Globalization and Development Strategies, Macroeconomic Policy, Regional and Bilateral Trade Agreements

        This edition of Key Indicators and Trends in Trade Policy 2016, subtitled ‘A Bad Year for World Trade’, explains that the deteriorating trends in 2015 of weaker demand, a declined value of international trade, and an economic collapse carried on to 2016. This report is structured in two parts. The first part presents an overview of the trade collapse of 2015. The second part provides illustrative statistics on international trade in goods and services covering the last 10 years. The second part is divided in two sections. Section 1 provides trade statistics at various levels of aggregation illustrating the evolution of trade across economic sectors and geographic regions. Section 2 presents some of the most commonly used trade indicators at the country level, so as to illustrate trade performance across countries.

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        The Long-term (English)
        Discussion paper by Nassif, André; Feijó, Carmem; Araújo, Eliane, 2011, 34 pages
        Categories: Macroeconomic Policy

        Using the structuralist-Keynesian theoretical approach, the paper affirms that, instead of macroeconomic fundamentals, the long-term trend of the real exchange rate level should not only be determined by structural forces and long-term economic policies, but also short-term macroeconomic policies and their indirect effects on other short-term economic variables. It also proposes an original concept of a long-term “optimal” real exchange rate for open emerging economies.

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        Measuring Monetary Policy in Open Economies
        Working paper by Cerdeiro, Diego A., 2010, 35 pages
        Categories: Macroeconomic Policy

        The paper extends Bernanke and Mihov's [6] closed-economy strategy for identification of monetary policy shocks to open-economy settings, accounting for the simultaneity between interest-rate and exchange-rate innovations. The methodology allows a separate treatment of two distinct monetary policy shocks, one that operates through open market operations, and another one that takes place through interventions in the foreign exchange market. Implementation of this strategy to the case of Argentina provides the stylized facts necessary to choose among competing theoretical models of this economy. In addition to studying the effects of monetary policy innovations, the present study sheds light on the endogenous component of monetary policy. In this regard, the paper finds that, notwithstanding the relative stability of the exchange rate and the accumulation of large amounts of international reserves, the central bank in Argentina has been far from absorbing balance of payments shocks in a currency-board fashion. The growing level of international reserves can be rationalized, instead, as the monetary authority's response to terms of trade, supply and domestic currency demand shocks.

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        Meeting Trade and Development Challenges in an Era of High and Volatile Energy Prices: Oil and Gas in LDCs and African Countries (English)
        Report by UNCTAD, 2006, 40 pages
        Categories: Commodities, Globalization and Development Strategies, Macroeconomic Policy

        This report is divided into four chapters. Chapter I describes trends in global consumption of oil and Africa’s production and consumption levels. Chapter II discusses the macro- and microeconomic impacts of oil price volatility. It reviews some of the strategies used in dealing with impacts and recommends policy measures to mitigate risks related to the sector. Chapter III examines the challenges facing importers in their procurement of crude oil and its derivatives and also looks at possible import financing methods. The paper concludes with a discussion on possible cooperation strategies aimed at improving access to oil and gas for African countries and ways to ensure that revenue from oil and gas exports meet the development needs of current and future generations.

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        Misreported Trade (English)
        Working paper by Mohammad Farhad, Michael Jetter, Abu Siddique, Andrew Williams, 2018, 45 pages
        Categories: Macroeconomic Policy, Trade Policy Analysis and Trade Data Sources

        This paper introduces a methodology to measure misreported trade in a consistent way across countries and over time. Our methodology does not require any assumptions about which countries may be more or less likely to misreport – rather, all indices are derived endogenously with available trade data. We derive seven specific indices related to overall misreporting, as well as over- and under-reporting of exports and imports. Applying this method to existing bilateral trade data on the HS 4-digit level from 1996-2015, we present several rankings and describe a few prominent cases, such as China. Overall, our indices can explain intuitive developments well and should help researchers to study countries’ trade misreporting in a global dimension that is comparable across countries and over time. We conclude the paper with an application, focusing on the role of tariff and VAT rates as predictors of import under-reporting. As predicted by economic theory, case studies, and economic intuition, we find positive correlations for both tariff and VAT rates with import under-reporting. These results are robust to the inclusion of potentially confounding factors, as well as country- and time-fixed effects.

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        A "new" Trade Theory of GATT/WTO Negotiations (English)
        Working paper by Ossa, Ralph, 2009, 51 pages
        Categories: Macroeconomic Policy, Trade Policy Analysis and Trade Data Sources, WTO Issues/Multilateral Trading System

        A novel theory of GATT/WTO negotiations that provides new answers to two prominent questions in the trade policy literature: First, what is the purpose of trade negotiations? And second, what is the role played by the fundamental GATT/WTO principles of reciprocity and nondiscrimination? Relative to the standard terms-of-trade theory of GATT/WTO negotiations, my theory makes two main contributions: First, it builds on a "new trade" model rather than the neoclassical trade model and therefore sheds new light on GATT/WTO negotiations between similar countries. Second, it relies on a production relocation externality rather than the terms-of-trade externality and therefore demonstrates that the terms-of-trade externality is not the only trade policy externality, which can be internalized in GATT/WTO negotiations.

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        Policy Responses to the Global Financial Crisis: Key Issues for Developing Countries (English)
        Working paper by Akyüz, Yilmaz / South Centre, 2009, 34 pages
        Categories: International Financial System, Macroeconomic Policy

        This working paper discusses the two types of challenges that developing and developed economies face, due to the current economic and financial crisis: First, the need for immediate policy responses, that aim at stabilizing financial markets and the economy as such, and second, the need for a fundamental reform of the international financial system. The paper discusses the constraints developing and emerging economies (DEEs) are facing in responding to deflationary and destabilizing impulses from the crisis. It proposes that the reform of the international financial architecture should concentrate on crisis prevention and crisis intervention and resolution. The discussion focuses on issues that are viewed as of particular importance for stability and growth in DEEs. This paper was produced by the South Centre to contribute to the better participation of developing countries in international negotiations.

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        Policy Space in Agricultural Markets: Policy Issues in International Trade and Commodities Research Study Series No. 73 (English)
        Report by Alain McLaren, 2016, 26 pages
        Categories: Enterprise Development, Macroeconomic Policy, Trade and Environment

        As an outcome of the Uruguay Round Agreement on Agriculture, all agricultural products now have a bound tariff rate on their imports. This system of bound tariffs combines the rigidity of an upper limit that is independent of future economic conditions but discretion as governments have a whole array of choices in terms of applied tariffs as long as they are set below the bound rate. One recurring argument is that bound rates may limit countries’ policy flexibility, or policy space, in response to particular economic circumstances. This paper looks at the use and availability of this policy space in agricultural markets. This is first done in a descriptive setting, then by assessing what plays a role in determining this space using an empirical analysis.

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        Policy Space to Prevent and Mitigate Financial Crises in Trade and Investment Agreements (English)
        Discussion paper by Gallagher, Kevin P., 2010, 34 pages
        Categories: International Economic Law, Macroeconomic Policy

        Do nations have the policy space to deploy capital controls in order to prevent and mitigate financial crises? This paper examines the extent to which measures to mitigate this crisis and prevent future crises are permissible under a variety of bilateral, regional and multilateral trade and investment agreements. It is found that the United States trade and investment agreements, and to a lesser extent the WTO, leave little room to manoeuvre when it comes to capital controls. This is the case despite the increasing economic evidence showing that certain capital controls can be useful in preventing or mitigating financial crises. It also stands in contrast with investment rules under the IMF, OECD and the treaties of most capital exporting nations which allow for at least the temporary use of capital controls as a safeguard measure. Drawing on the comparative analysis conducted in the paper, the author offers a range of policies that could be deployed to make the United States investment rules more consistent with the rules of its peers and the economic realities of the 21st century.

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        Price Levels and Economic Growth: Making Sense of the PPP Changes Between ICP Rounds (English)
        Working paper by Ravallion, Martin/World Bank, 2010, 25 pages
        Categories: Macroeconomic Policy

        To the surprise of many observers, the 2005 International Comparison Program (ICP) found substantially higher purchasing power parity (PPP) rates, relative to market exchange rates, in most developing countries. For example, China’s price level index -- the ratio of its PPP to its exchange rate -- doubled between the 1993 and 2005 rounds of the ICP. The paper tries to explain the observed changes in PPPs. Consistently with the Balassa-Samuelson model, evidence is found of a "dynamic Penn effect," whereby more rapidly growing economies experience steeper increases in their price level index. This effect has been even stronger for initially poorer countries. Thus the widely-observed static (cross-sectional) Penn effect has been attenuated over time. On also taking account of exchange rate changes and prior participation in the ICP’s price surveys, 99 percent of the variance in the observed changes in PPPs is explicable. Using a nested test, the World Bank’s longstanding method of extrapolating PPPs between ICP rounds using inflation rates alone is out performed by the model proposed in this paper.

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        Public Debt and Economic Growth : Is There a Causal Effect? (English)
        Working paper by Panizza, Ugo, Panizza, Presbitero, Andrea F., 2012, 48 pages
        Categories: Macroeconomic Policy

        This paper uses an instrumental variable approach to study whether public debt has a causal effect on economic growth in a sample of OECD countries. The results are consistent with the existing literature that has found a negative correlation between debt and growth. However, the link between debt and growth disappears once we instrument debt with a variable that captures valuation effects brought about by the interaction between foreign currency debt and exchange rate volatility. We conduct a battery of robustness tests and show that our results are not affected by weak instrument problems and are robust to relaxing our exclusion restriction.

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        Regional Arrangements To Support Growth And Macro-policy Coordination In Mercosur (English)
        Discussion paper by Fanelli, José María /UNCTAD, 2007, 42 pages
        Categories: Emerging Economies and South South Cooperation, Macroeconomic Policy, Regional and Bilateral Trade Agreements

        The main goal of the paper is to discuss the problem of macroeconomic policy coordination in MERCOSUR and how it could contribute to sustaining growth. In the first part, the paper reviews the macroeconomic situation of MERCOSUR, emphasizing the role of the developments that followed the regime change in Brazil in 1999 and in other member countries afterwards. The second part analyses the characteristics of macroeconomic fluctuations in the region. The last section addresses what member countries can do to support growth, macro-policy coordination, and financial integration.

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        Regional Monetary Cooperation and Growth-enhancing Policies: the New Challenges for Latin America and the Caribbean (English)
        Case study by UNCTAD, 2011, 84 pages
        Categories: Emerging Economies and South South Cooperation, Macroeconomic Policy, Regional and Bilateral Trade Agreements

        Using the SUCRE initiative as a starting point, this study aims at raising awareness and building consensus on the issue of regional monetary cooperation and its links to growth and development.

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        Rethinking Development Strategies After the Financial Crisis, Volume I: Making the Case for Policy Space
        Book by Alfredo Calcagno, Sebastian Dullien, Alejandro Márquez-Velázquez, Nicolas Maystre, Jan Priewe (ed), 2015, 118 pages
        Categories: Globalization and Development Strategies, Macroeconomic Policy

        The global financial crisis in 2008 marked a starting point for a comprehensive rethinking of economic theories and policies, reinforcing the importance of implementing strategies for development as opposed to leaving the economy to market forces. In this context, this publication explores the nature and consequences of the crisis, as well as the diversity of economic and social development among developing countries, and looks at the reasons behind the recent improvement in developing countries' performances and its potential for continuation after the financial crisis.

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        Rethinking Pro-growth Monetary Policy in Africa: Monetarist Versus Keynesian Approach / Repenser La Politique Monétaire Pour La Croissance En Afrique: Approche Monétariste Versus Keynesienne (English)
        Policy brief by Christian Lambert NGUENA, 2013, 8 pages
        Categories: Macroeconomic Policy, VI Members Research

        The relative positive economic growth experienced by most African countries in the recent decade has come with insufficient demand stimulation. The concern of poverty at the forefront of economic policy, the need for inclusive growth and sustainable development, inter alia, brings forward the inevitable question of the monetary policy responsibility. Accordingly, the monetarist theory that focuses on price stability inherently neglects the demand stimulation aspect of economic prosperity. Since the mid 1980s, the monetarist school driven by its central aim of fighting inflation and maintaining credibility in markets and economic agents has been priority for monetary authorities (especially in Africa). To this effect, while good results in terms of inflation targeting has been achieved in many African countries; economic growth has sometimes been low. Hence, in light of the above, using a statistical and theoretical debate method, the Credible Monetary Policy (CMP)1 paradox is traceable to Africa. Accordingly, with the promising economic environment in Africa, we recommend the promotion of a monetary policy oriented toward improving economic growth under the constraint of price stability. In light of the above view, there are some note worthy signs such the recent decision by the two CFA zone central banks to either maintain interest rates at a low level or reduce it despite tightening measures of monetary policy taken by the European Central Bank (ECB) earlier in the year. In the same vein, the central bank of South Africa has maintained its policy of low interest rates with an objective of economic expansion. Since, the 2008 financial crisis, the consolidation of the Federal Reserve’s declared final objective of lowering interest rates and making emergency loans is an eloquent example to reassure African central banks in the choice of the pro-growth monetary policy option.

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        Risk Factors in International Financial Crises: Early Lessons from the 2008-2009 Turmoil
        Working paper by Dullien, Sebastian/ HTW, 2010, 21 pages
        Categories: Macroeconomic Policy

        This paper analyses the global transmission of the recent economic and financial crisis as a function of macroeconomic factors such as per capita gross domestic product, current-account positions prior to the crisis, exchange-rate regimes, inflation prior to the crisis and financial openness. It finds that large current-account imbalances (both surpluses and deficits) were a risk factor in the current global economic turmoil. It also finds that countries that use currency boards have suffered much more from the crisis than countries with other exchange-rate regimes. Financial openness appears to have increased the risk of experiencing a deep recession, while higher inflation prior to the crisis seems to have mitigated its impact.

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        Science, Technology & Innovation Policy Review: Islamic Republic of Iran (English)
        Report by UNCTAD, 2016, 112 pages
        Categories: Macroeconomic Policy, Policy Reviews and Briefs, Science and Technology

        The Science, Technology & Innovation Policy Review (STIP Review) is a neutral and unbiased assessment of the effectiveness of government policies with regard to STI development and a pointer to the way ahead. It examines Iran’s National Innovation System, along with its oil, gas and petrochemical industries and biopharmaceuticals. The review observed that the national development policy was aiming to shift the country from a natural-resource-based economy to a more knowledge-based one; a need for economic diversification away from the predominant O&G industry through a process of industrialization; and an export-oriented economic approach. The Islamic Republic of Iran’s national policy documents, also includes the following countries: Afghanistan, Armenia, Azerbaijan, Bahrain, Egypt, Georgia, Iran (Islamic Republic of), Iraq, Israel, Jordan, Kazakhstan, Kuwait, Kyrgyzstan, Lebanon, Oman, Palestine, Pakistan, Qatar, Saudi Arabia, Syria, Tajikistan, Turkey, Turkmenistan, United Arab Emirates, Uzbekistan and Yemen.

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        The Scope for Foreign Exchange Market Interventions (English)
        Discussion paper by Bofinger, Peter / University of Wuerzburg, 2011, 36 pages
        Categories: Macroeconomic Policy

        The paper advocates for a strategy of managed floating which can reconcile three objectives that are usually not considered reconcilable - an autonomous monetary policy, a control over the exchange rate and free capital movements. If a central bank targets an exchange rate level based on the interest rate difference between two currencies, it can at the same time set its policy rate autonomously. By eliminating the interest rate differences between countries, such targeting also eliminates the incentives for carry trade and is hence compatible with capital mobility.

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        Tool Box for Policy Coherence in Access to Medicines and Local Pharmaceutical Production (English)
        Report by UNCTAD, 2017, 67 pages
        Categories: Macroeconomic Policy

        The present document seeks to provide interested governments with an overview of policy tools that may be considered to create a framework conducive for promoting local pharmaceutical production and access to medicines. As the promotion of local pharmaceutical production depends on the coordination of various areas of policy, such as drug regulation, research and development, investment, trade and intellectual property, the Tool Box emphasizes the importance of ensuring coherence among policies that at first sight appear unrelated to each other. It seeks to assist policy makers in understanding the cross cutting nature of promoting local production. The Tool Box provides a brief presentation of the most relevant policy tools in this regard. The Tool Box does not attempt to resolve the question of desirability of local production as compared to the importation of medicines. It is addressed to those governments that have made the policy decision to promote local manufacturing and that wish to prepare a framework for sustainable production and, to the greatest possible extent, increased access to medicines.

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        Towards More Balanced Growth Strategies in Developing Countries: Issues Related to Market Size, Trade Balances and Purchasing Power
        Paper by Jörg Mayer/UNCTAD, 2013, 42 pages
        Categories: Globalization and Development Strategies, Macroeconomic Policy

        Concentrating on household consumption, the paper shows that the sales potential in some large emerging economies is approaching that in developed countries but also that imports might meet most new domestic consumption demand. Sustaining a shift towards a more balanced growth path requires changes in the production structure, fostered by product innovation, to make domestic production patterns better correspond to newly emerging demand patterns. The associated new employment and wage opportunities would allow realizing emerging sales potentials through rising incomes, rather than rising household debt.

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        Trade and Development Report 1996, Chapter VI: Rethinking policies for development (English)
        Report by UNCTAD, 1999, 20 pages
        Categories: Globalization and Development Strategies, Macroeconomic Policy

        What: This chapter argues that development thinking and policies will need a radical review if developing countries are to be assured better growth prospects, narrow the income gap with the advanced industrial countries, and remove the scourge of widespread and persistent poverty. Policies need to be reoriented to regulate capital flows and establish competitive industries that will not only increase exports but also reduce the import content of growth. However, action by developing countries alone cannot provide the whole solution. Serious attention should also be paid to the systemic biases and asymmetries in the workings of the international trading system which limit their growth prospects. The successful pursuit of outward-oriented policies also requires greater openness of markets in industrial countries to their exports, all the more so in view of the current "aid fatigue" and the failure of private financial markets to provide adequate development finance. Who: For teachers, students and researchers focusing on development issues and strategies. How: Can be used as a background reading material or for research work on strategies and policies for development.

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        Trade and Development Report 2001, Chapter V: Exchange rate regimes and the scope for regional cooperation (English)
        Report by UNCTAD, 2001, 21 pages
        Categories: International Financial System, Macroeconomic Policy

        What: This chapter discusses the various choices and difficulties developing countries and economies in transition encounter in determining an appropriate exchange rate regime. According to the report the key question is whether there exists a viable and appropriate exchange rate regime for developing and transition economies that are closely integrated into global financial markets when major reserve currencies are subject to frequent gyrations and misalignments, and when the size and speed of international capital movements can very quickly overwhelm the authorities in such countries and narrow their policy options. It also reviews the recent debate on the reform of the international financial architecture in view of the contribution of developing countries and economies in transition to external vulnerability, and currency and financial crises. As arrangements at a global level for a stable system of exchange rates are not foreseeable in the near future, the report questions whether viable solutions can be found at the regional level by looking into the post-Bretton Woods experience of Europe. Who: For researchers, teachers and students on exchange rate regimes. How: An authoritative report that can be used as a background reading.

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        Trade and Development Report 2001, Chapter VI: Crisis management and burden sharing (English)
        Report by UNCTAD, 2001, 23 pages
        Categories: Macroeconomic Policy

        What: There is a growing body of opinion that effective management of financial crises in emerging markets requires a judicious combination of action on three fronts: a domestic macroeconomic policy response; timely and adequate provision of international liquidity; and the involvement of the private sector. The international policy response to the Asian crisis was far from optimal as an undue burden was placed on domestic policies; rather than restoring confidence and stabilizing markets, hikes in interest rates and fiscal austerity served to deepen the recession and aggravate the financial problems of private debtors. The issues of private sector involvement and provision of official assistance in crisis management and resolution have therefore been high on the agenda in the debate on reform of the international financial architecture and this chapter seeks to address this problem by defining the state of play, examining the issues that remain to be resolved and assessing various options proposed. Who: For teachers, students and researchers focusing on management of financial crisis. How: Can be used as a background reading material or for research work on international and national policy responses to financial crisis.

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        Trade and Development Report 2003, Chapter VI - Policy reforms and economic performance: The Latin American experience (English)
        Report by UNCTAD, 2003, 24 pages
        Categories: Macroeconomic Policy

        What: This chapter argues that policy orientation in Latin American countries has failed to produce an appropriate macroeconomic environment for investors and firms to encourage and support the creation and expansion of productive capacity and the improvement of productivity and international competitiveness. Neither has it been able to provide effective policy interventions at the sectoral or micro levels of the kind practised in East Asia. This chapter examines the salient features of the policy reforms and economic performances of Latin American countries from a comparative historical perspective. It examines the evolution of economic policy in the region and analyses the dilemmas generated by the new policy approach with regard to macroeconomic management, structural adjustment and development. Finally, it discusses the options available for removing some key constraints on policy actions. Who: For teachers, students and researchers focusing on policy reform and economic performance in Latin America. How: As a background reading or for research work on the Latin American experience of structural adjustments, policy reforms and changes to their development strategy.

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        Trade and Development Report 2004: Policy coherence, development strategies and integration into the world economy (English)
        Report by UNCTAD, 2004, 188 pages
        Categories: International Financial System, Macroeconomic Policy, Trade and Poverty

        What: This year's Trade and Development Report is intended to contribute to the debate on policy coherence. It examines how international trading relations are affected by the international monetary and financial systems, and shows that monetary and financial instability can have serious impact on the ability of developing countries to participate successfully in the international trading system. The report stresses the importance of building a truly multilateral monetary system, in which all countries, not just a few, have a voice in the decision making. The report also discusses exchange-rate management at the national and international levels, and shows how it can contribute significantly to job creation and poverty reduction. Who: A very authoritative report for anyone teaching and researching global trade, investment and development issues. How: A lot of the chapters, data and charts from this report can be used for lectures, research work and background reading.

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        Trade and Development Report 2011: Post-crisis policy challenges in the world economy (English)
        Report by UNCTAD, 2011, 224 pages
        Categories: Commodities, Globalization and Development Strategies, Macroeconomic Policy

        The Trade and Development Report 2011 focuses on the post-crisis policy challenges in the world economy. It concludes that the recovery is slowing down and that the "two-speed recovery" in developed and developing countries is mainly the result of wide differences in domestic demand. It shows that post-crisis reforms are progressing slowly, and addresses the main regulatory reforms that should take place in relation to financial markets. To diminish the effect of fnancialization of commodity markets based on herd behaviour, the TDR proposes measures to increase transparency in physical and derivatives markets. Finally, to decrease the disparity between macroeconomic fundamentals and foreign exchange markets, the report recommends a system of rules based management floating at a multilateral level - this would greatly improve international financial stability.

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        Trade and Development Report 2011: Post-crisis policy challenges in the world economy - Overview (English)
        Report by UNCTAD, 2011, 34 pages
        Categories: Globalization and Development Strategies, Macroeconomic Policy

        The Trade and Development Report 2011 focuses on the post-crisis policy challenges in the world economy. It concludes that the recovery is slowing down and that the "two-speed recovery" in developed and developing countries is mainly the result of wide differences in domestic demand. It shows that post-crisis reforms are progressing slowly, and addresses the main regulatory reforms that should take place in relation to financial markets. To diminish the effect of fnancialization of commodity markets based on herd behaviour, the TDR proposes measures to increase transparency in physical and derivatives markets. Finally, to decrease the disparity between macroeconomic fundamentals and foreign exchange markets, the report recommends a system of rules based management floating at a multilateral level - this would greatly improve international financial stability.

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        Trade and Development Report 2012 - Policies for Inclusive and Balanced Growth (English)
        Report by UNCTAD, 2012, 208 pages
        Categories: Macroeconomic Policy, Trade and Poverty

        The world economy, which continues to suffer from the fallout of the financial crisis that began in late 2007 and the meltdown in September 2008, has not been able to revive the growth conditions of the preceding decade. Those conditions had been particularly supportive of economic and social progress in the developing world, and the resulting momentum, especially in some of the larger developing countries, helped to stoke recovery in the world economy once the worst of the crisis had been contained. However, those countries are now losing that momentum and downside risks for the world economy are growing again. The immediate problem is the inability of the developed countries to return to a normal growth pattern, but there is also an equally serious problem of contagion. Amidst their fragile recovery, an unreformed (and unrepentant) financial sector and macroeconomic policies that are timid at best, and counterproductive at worst, the developing countries will find it difficult to sustain their own growth dynamic, let alone that of the global economy. Therefore, a fundamental policy reorientation is needed, recognizing that healthy and inclusive growth will require a stable expansion of consumption and investment in productive capacity based on favourable income expectations of the working population and positive demand expectations of entrepreneurs. This requires a rethinking of the principles underlying the design of national economic policy and supportive international institutional arrangements.In detail, in its first chapter the report is dealing with current trends and challenges in the world economy. In the second chapter the report covers the main issues of income inequality and its evolution. Further on the third chapter concerns with the impacts of changes in globalization and technology for income inequality and the fourth chapter with the role of fiscal policy in income distribution. The last chapter finishes the report with a reconsideration of current economics and politics of inquality.

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        UNCTAD Policy Brief N° 24/2011: On The Brink : Fiscal Austerity Threatens A Global Recession (English)
        Policy brief by UNCTAD TDR, 2011, 4 pages
        Categories: Macroeconomic Policy, Policy Reviews and Briefs

        Due to sluggish private demand, several advanced economies are hovering on the brink of a second bout of recession. Yet, in many of these countries political attention has turned to ways to cut fiscal deficits and reduce the domestic public debt. This has created a dangerous accumulation of risks for the world economy. The private sector can only successfully deleverage (i.e., reduce its debt) if someone else is willing to take on higher debt and support demand. If the private and the public sectors try to deleverage simultaneously, they must either find debtors elsewhere, or the economy will tailspin into a depression. As the developing world is both unable and unwilling to accept the role of debtor of last resort, dangerous pressures are building up. Unless there is a rapid policy turnaround, the world is in danger of repeating the mistakes of the 1930s. In today’s highly integrated global economy, the contractionary contagion will affect all countries. Emerging and developing economies need to prepare contingency plans.

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        UNCTAD Policy Brief No. 26/2012: Greater Income Share for Labour - the Essential Catalyst for Global Economic Recovery and Employment (English)
        Policy brief by UNCTAD, 2012, 4 pages
        Categories: Macroeconomic Policy, Policy Reviews and Briefs

        This policy brief examines the weakness of the advanced economies which poses a threat for recovery of the world economy, as developing countries’ domestic demand is not strong enough to sustain their recent growth path. It discusses wage compression in relation to economic development, the revival of demand from traditional markets in the North, the prospects of fiscal austerity and active income policies.

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        Unctad Policy Brief No. 3/2008: The Crisis of a Century (English)
        Policy brief by UNCTAD, 2008, 2 pages
        Categories: Macroeconomic Policy, Policy Reviews and Briefs

        As the financial crisis continues its evolution at dizzying speed, the business model underlying a growing share of financial sector activity has been increasingly discredited. This policy brief suggests that a considerable degree of public intervention is required to avoid greater damage to the financial system and the real economy. It is also imperative to strengthen regulation and increase the transparency of financial instruments and institutions. Overall, macroeconomic policy should aim at avoiding a global recession or even depression.

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        Unctad Policy Brief No.5/2008: Will We Never Learn? (English)
        Policy brief by UNCTAD, 2008, 2 pages
        Categories: Macroeconomic Policy, Policy Reviews and Briefs

        As the financial crisis becomes increasingly global, the world economy is caught in a loop of weaknesses and seems headed for a deep and synchronized downturn. Some developing and emerging economies will be particularly affected because of their vulnerability to declining exports, falling commodity prices, and negative wealth effects stemming from currency mismatches. But the world seems not to have learned the lessons from previous financial crises: that traditional adjustment packages can be counter¬productive, and that better global exchange rate arrangements will be critical if we are to achieve and maintain monetary and financial stability. This policy brief contends that all countries whose real economies are exposed will need to adopt countercyclical policies to stimulate domestic demand and compensate for shrinking foreign demand. Contrary to conventional wisdom, this also applies to countries with devaluing currencies. The current IMF approach asking for pro-cyclical policies in crisis countries is inadequate. UNCTAD has long argued that multilateral coordination is the only viable solution.

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        What Went Wrong? Alternative Interpretations of the Global Financial Crisis
        Working paper by Priewe, Jan/ HTW, 2010, 39 pages
        Categories: International Financial System, Macroeconomic Policy

        This paper first reviews different interpretations of the global financial crisis of 2008-2009 (and its aftermath), focusing on the proximate causes in the financial sector of the United States. However, behind the immediate causes lie ultimate causes without which the crisis cannot be properly understood. These were mainly the global imbalances in trade and in cross-border capital flows, the systemic root of which lies in what the paper refers to as a “new Triffin dilemma”. This dilemma relates to the shortcomings of the present global currency system that uses the United States dollar as the key reserve currency, which has to serve both national and global objectives. Other ultimate causes are the trend towards a finance-driven capitalism in many OECD countries, most pronounced in the United States, and the trend towards greater income inequality, which dampens aggregate demand and contributes to financial instability as well as global imbalances. The confluence of the proximate and ultimate causes paved the way for the crisis.

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        World Development Report 2014 - Risk and Opportunity: Managing Risk for Development (English)
        Report by World Bank, 2013, 363 pages
        Categories: Macroeconomic Policy

        The WDR 2014 focuses on questions such as the role of the state in helping people manage risks by direct interventions or providing an enabling environment, improving government's risk and introduces mechanisms for risk management.It finds that: Taking on risks is necessary to pursue opportunities for development; to confront risk successfully, it is essential to shift from unplanned and ad hoc responses when crises occur to proactive, systematic, and integrated risk management and that the trade-offs and obstacles to risk management must also be identified, prioritized, and addressed. The report emphasizes that risk management requires shared action and responsibility at different levels of society and governments have a critical role in managing these systemic risks.

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        World Economic Outlook: Housing and the Business Cycle (English)
        Report by IMF, 2008, 303 pages
        Categories: Macroeconomic Policy

        The World Economic Outlook (WEO) presents the IMF staff's analysis and projections of staff’s view of the economic developments at the global level in spring 2008, in major country groups (classified by region, stage of development, etc.), and in many individual countries It focuses on current conditions and prospects, including the financial problems of the U.S. economy which first emerged in subprime mortgage lending, as well as on the analysis of economic developments and prospects.

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        World Economic Situation and Prospects 2007 (English)
        Report by UN-DESA, 2007, 177 pages
        Categories: Macroeconomic Policy

        What: This report is a joint product of the Department of Economic and Social Affairs (DESA), UNCTAD and the five United Nations regional commissions. It provides an overview of recent global economic performance and short-term prospects for the world economy and of some key global economic policy and development issues. For 2007, modest inflation, insufficient employment growth and a deceleration in the world economy are expected, although developing countries and transition economies will continue to robust growth. A downturn in the U.S. housing market, increasing oil prices and a lack of coordination in macroeconomic policies are cited as some of the challenges countries will have to contend with this year. As an annex the report contains tables with macroeconomic indicators for the past ten years. How: Useful background document on recent trends in the world economy. Who: Lecturers in macroeconomics and international economics.

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        World Economic Situation and Prospects 2009 - Executive Summary (English)
        Summary by DESA; UNCTAD; ECA; ECE; ECLAC; ESCAP; ESCWA, 2009, 15 pages
        Categories: Macroeconomic Policy

        World Economic Situation and Prospects (WESP) provides an overview of recent global economic performance and short-term prospects for the world economy and of some key global economic policy and development issues. One of its purposes is to serve as a point of reference for discussions on economic, social and related issues taking place in various United Nations entities during the year. The report of 2009 analyzes in detail the evolution of the global financial crisis during 2008 and the more fundamental factors that led to its build-up. It further assesses the impact on global economic activity, especially in developing countries. The report also reviews the policy actions so far taken worldwide in response to the global financial crisis. It recommends more forceful fiscal policy stimuli need to be taken in an internationally concerted manner in order to prevent the world economy from falling into a much deeper and more prolonged recession. The WESP further details a number of more fundamental reforms to the international financial system that are needed to reduce risks of a recurrence of such a devastating crisis in the future.

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        World Economic Situation and Prospects 2009 - Full Report (English)
        Report by DESA; UNCTAD; ECA; ECE; ECLAC; ESCAP; ESCWA, 2009, 188 pages
        Categories: Macroeconomic Policy

        World Economic Situation and Prospects (WESP) provides an overview of recent global economic performance and short-term prospects for the world economy and of some key global economic policy and development issues. One of its purposes is to serve as a point of reference for discussions on economic, social and related issues taking place in various United Nations entities during the year. The report of 2009 analyzes in detail the evolution of the global financial crisis during 2008 and the more fundamental factors that led to its build-up. It further assesses the impact on global economic activity, especially in developing countries. The report also reviews the policy actions so far taken worldwide in response to the global financial crisis. It recommends more forceful fiscal policy stimuli need to be taken in an internationally concerted manner in order to prevent the world economy from falling into a much deeper and more prolonged recession. The WESP further details a number of more fundamental reforms to the international financial system that are needed to reduce risks of a recurrence of such a devastating crisis in the future.

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        World Economic Situation and Prospects 2010: Full Report
        Report by DESA; UNCTAD; ECA; ECE; ECLAC; ESCAP and ESCWA, 2010, 202 pages
        Categories: Globalization and Development Strategies, Macroeconomic Policy

        World Economic Situation and Prospects (WESP) is a joint product of the Department of Economic and Social Affairs, the United Nations Conference on Trade and Development and the five United Nations regional commissions. It provides an overview of recent global economic performance and short-term prospects for the world economy and of some key global economic policy and development issues. One of its purposes is to serve as a point of reference for discussions on economic, social and related issues taking place in various United Nations entities during the year.

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        World Economic Situation and Prospects 2011 (English)
        Report by DESA,UNCTAD,ECA,ECE,ECLAC,ESCAP,ESCWA, 2011, 204 pages
        Categories: Macroeconomic Policy

        The World Economic Situation and Prospects 2011 analyses the slowdown in economic growth among developed countries as from mid-2010. It highlights the continued challenge posed by high unemployment rates in many economies and outlines a number of risks and uncertainties for the economic outlook such as a premature withdrawal of policy stimulus, increased exchange rate volatility and a renewed widening of global imbalances. Against this background, several policy challenges are discussed in greater detail, including the optimal design of fiscal policies as well as the coordination between fiscal and monetary policies, the provision of sufficient support to developing countries in addressing the fallout from the crisis and the coordination of policy measures at the international level.

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        World Economic Situation and Prospects 2011 - Executive Summary (English)
        Report by DESA,UNCTAD,ECA,ECE,ECLAC,ESCWA,ESCAP, 2011, 13 pages
        Categories: Macroeconomic Policy

        The World Economic Situation and Prospects 2011 analyses the slowdown in economic growth among developed countries as from mid-2010. It highlights the continued challenge posed by high unemployment rates in many economies and outlines a number of risks and uncertainties for the economic outlook such as a premature withdrawal of policy stimulus, increased exchange rate volatility and a renewed widening of global imbalances. Against this background, several policy challenges are discussed in greater detail, including the optimal design of fiscal policies as well as the coordination between fiscal and monetary policies, the provision of sufficient support to developing countries in addressing the fallout from the crisis and the coordination of policy measures at the international level.

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        World Economic Situation and Prospects 2012 (English)
        Report by DESA, UNCTAD, ECA, ECE, ECLAC, ESCAP, ESCWA, 2011, 204 pages
        Categories: Macroeconomic Policy

        World Economic Situation and Prospects (WESP) provides an overview of recent global economic performance and short-term prospects for the world economy and of some key global economic policy and development issues. One of its purposes is to serve as a point of reference for discussions on economic, social and related issues taking place in various United Nations entities during the year. The report 2012 is following two years of anaemic and uneven recovery from the global financial crisis, the world economy is teetering on the brink of another major downturn. Output growth has already slowed considerably during 2011, especially in the developed countries. The baseline forecast foresees continued anaemic growth during 2012 and 2013. Such growth is far from sufficient to deal with the continued jobs crises in most developed economies and will drag down income growth in developing countries.

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        The World Economic Situation and Prospects 2013 (English)
        Report by DESA; UNCTAD; ECA; ECE; ECLAC; ESCAP; ESCWA, 2013, 207 pages
        Categories: Macroeconomic Policy

        The 2013 World Economic Situation and Prospects (WESP) analyzes the post-crisis world economy as it struggles with continued weakening growth in the face of major uncertainties. For 2013 and 2014, it projects disappointing global growth, much slower poverty reduction in many developing countries, and narrowing fiscal space for investments in the many critical areas needed for achieving the Millennium Development Goals.

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        The World Economic Situation and Prospects 2013 - Executive Summary (English)
        Summary by DESA; UNCTAD; ECA; ECE; ECLAC; ESCAP; ESCWA, 2013, 10 pages
        Categories: Macroeconomic Policy

        The 2013 World Economic Situation and Prospects (WESP) analyzes the post-crisis world economy as it struggles with continued weakening growth in the face of major uncertainties. For 2013 and 2014, it projects disappointing global growth, much slower poverty reduction in many developing countries, and narrowing fiscal space for investments in the many critical areas needed for achieving the Millennium Development Goals.

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        World Economic Situation and Prospects 2014 (English)
        Report by UN/DESA and UNCTAD, 2014, 198 pages
        Categories: Macroeconomic Policy

        The World Economic Situation and Prospects 2014 reports that the global economy is improving but remains vulnerable to new and old headwinds. Global economic growth is forecast to accelerate from a sluggish 2.1 per cent in 2013 to 3.0 per cent in 2014 and 3.3 per cent in 2015. The report warns of the risks associated with the upcoming unwinding of quantitative easing programs in major developed economies.

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        World Trade Report 2014 - Trade and development: recent trends and the role of the WTO (English)
        Report by WTO, 2014, 1 pages
        Categories: Globalization and Development Strategies, Macroeconomic Policy, WTO Issues/Multilateral Trading System

        The report examines how four recent major economic trends have changed how developing countries can use trade to facilitate their development. These trends are the economic rise of developing economies, the growing integration of global production through supply chains, the higher prices for agricultural goods and natural resources, and the increasing interdependence of the world economy. The Report also looks into the role that the WTO plays.

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