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Building knowledge for trade and development

    • Includes resources presenting and analysing the international financial architecture, its impact, roots, strengths and weaknesses, and inter-institutional interdependencies and cooperations.
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        Access To Financial Services As A Driver For The Post-2015 Development Agenda
        Policy brief by UNCTAD, 2015, 4 pages
        Categories: Globalization and Development Strategies, International Financial System, Policy Reviews and Briefs

        This policy brief aims to highlight several components of a best-fit policy mix to expand financial inclusion. New technologies and innovative business models exhibit great potential to overcome access barriers. Governments have an important role in setting up sound regulatory frameworks and conditions to expand the supply and affordability of financial services, to ensure that such services remain supportive of the real economy, and to create an expanded demand for them, such as through financial education and empowerment. Actions towards financial inclusion could contribute to facilitated, speedier, safer and less costly transfer of remittances, the importance of which is also recognized within the sustainable development goals (SDGs).

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        Aid, private capital flows and external debt: a review of trends (English)
        Report by Least Developed Countries Program, 2000, 28 pages
        Categories: Finance for Development, International Financial System

        What: Based on the Least Developed Countries report from 2000, this is a clear and detailed presentation of external finance and how it contributes to finance development. Who: This document is a good introduction to the problem of external finance for anyone studying or teaching the subject. How: Could be used as a basis for a lecture on development finance.What: Based on the Least Developed Countries report from 2000, this is a clear and detailed presentation of external finance and how it contributes to finance development. Who: This document is a good introduction to the problem of external finance for anyone studying or teaching the subject. How: Could be used as a basis for a lecture on development finance.

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        Assessing the Impact of the Current Financial and Economic Crisis on Global FDI Flows (English)
        Study by UNCTAD, 2009, 72 pages
        Categories: International Financial System, Investment

        The year 2008 marked the end of a growth cycle in international investment that started in 2004 and saw world foreign direct investment (FDI) inflows reach a historic record of $1.9 trillion in 2007. Due to the impact of the ongoing worldwide financial and economic crisis, FDI flows are estimated to have declined by 15 per cent in 2008. A further decrease in FDI flows can be expected in 2009, as the full consequences of the crisis on transnational corporations’ (TNCs) investment expenditures continue to unfold. The fall in global FDI in 2008–2009 is the result of two major factors affecting domestic as well as international investment. First, the capability of firms to invest has been reduced by a fall in access to financial resources, both internally – due to a decline in corporate profits – and externally – due to the lower availability and higher cost of finance. Second, the propensity to invest has been affected negatively by economic prospects, especially in developed countries that are hit by the most severe recession of the post-war era. The impact of both factors is compounded by the fact that, as of early 2009, a very high level of risk perception is leading companies to extensively curtail their costs and investment programmes in order to become more resilient to any further deterioration of their business environment. All of the three major types of FDI (market-seeking, efficiency-seeking and resources-seeking) will be impacted by these factors, although with different magnitudes and consequences on location patterns. For dealing effectively with the crisis and its economic aftermath, it is important for policymakers to resist the temptation of “quick fix” solutions or protectionism, and to maintain a favourable business and investment climate overall. Recent announcements and commitments made at the London Group of Twenty (G-20) Summit in April 2009 have reconfirmed this policy stance.

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        Beyond the IMF (English)
        Discussion paper by Kapur, Devesh; Webb, Richard / UNCTAD, 2007, 34 pages
        Categories: International Financial System

        A consensus has developed that the International Monetary Fund (IMF) is not fulfilling its role, prompting multiple proposals for reform. However, this paper argues that the focus on reform should be complemented with an exploration of alternatives outside the IMF which hold the potential to not only give developing countries greater bargaining leverage with the Fund but also, by increasing competition, spurring the institution to better performance. The paper argues that most of the IMF’s functions are being carried out in part through alternative institutional arrangements. It focuses in particular on the insurance role of the Fund and argues that developing countries are developing alternative insurance mechanisms, from a higher level of reserves, to regional co-insurance facilities to remittances as a counter-cyclical source of foreign exchange. The de facto exit of its clientele has been driven by the high political costs associated with Fund borrowing and now poses unprecedented challenges for the Fund, in particular pressures on its income. The paper argues for a rapid restructuring and significant cuts of the Fund’s administrative budget with the budget savings instead directed to lower the interest rates charged to borrowers.

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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 to developing countries and the reform of the international financial system (English)
        Discussion Paper by Yilmaz Akyuz and Andrew Cornford, 1999, 54 pages
        Categories: International Financial System

        Background discussion paper on the changes in the international financial system and on the need for adapted policies to deal with international financial instability; it argues that in the absence of measures at the international level, developing countries have to control capital flows. Interesting for anyone interested in the reform of financial system and policies responses to financial instability. It provides a good analysis but data and information need to be updated.

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        Commentary on the financial stability forum's report of the working group on capital flows (English)
        Discussion Paper by Andrew Cornford, 2000, 20 pages
        Categories: International Financial System

        What: A G-24 discussion paper on the threat to the gains of a liberal financial system by instability of capital flows. Focuses on possible changes in practices of recipient countries and how to manage risk and build institutional capacity. Who: Of interest to anyone looking critically at the subject of capital markets. How: Could be used to conduct a short analysis based on a working group's conclusions on capital flows.

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        The Contemporary Reform of Global Financial Governance: Implications of and Lessons from the Past (English)
        Discussion paper by Eric Helleiner (University of Waterloo, Canada) / UNCTAD, 2009, 32 pages
        Categories: International Financial System

        As the world experiences its worst financial crisis since the 1930s, there is a widespread call for global financial reforms similar to the Bretton Woods Agreements of 1944. This paper argues that officials will need to think more creatively and ambitiously about international financial reform than they have done so far. Policymakers seeking to move beyond the present agenda could consider initiatives in each of the three issue areas identified at Bretton Woods. These include: - innovations to regulate international financial markets more tightly - innovations to address global imbalances - innovations to promote international development. However, the contemporary agenda must consider new mechanisms and address an even broader range of topics than in 1944. Therefore, it should take into account the reserve currency status of the dollar, the currency composition of borrowing by developing countries, sovereign wealth funds and the role of regional cooperation, among others.

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        The debate on the international financial architecture: reforming the reformers (English)
        Discussion Paper by Yilmaz Akyuz, 2000, 24 pages
        Categories: International Financial System

        This discussion paper examines the progress made in the reform of the international financial architecture since the East Asian crisis and ends with a brief discussion of what developing countries could do at the national, regional and international level to prevent financial crises and to protect against financial instability.

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        Debt relief, the new policy conditionality and poverty reduction strategies (English)
        Report by UNCTAD, 2000, 36 pages
        Categories: Finance for Development, International Financial System

        Based on the LDCs report from 2000, this document is a detailed analysis of HIPC initiative and its relationship with poverty reduction strategies and conditional policies. Of interest to anyone who needs to understand modalities, changes and implications of debt relief on poverty reduction. This resource provides a high quality analysis of HIPC initiative with data, examples and case studies. Key text to understand debt mechanisms.

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        Debt Vulnerabilities in Developing Countries: a New Debt Trap?- Volume I: Regional and Thematic Analyses (English)
        Report by UNCTAD, 2018, 96 pages
        Categories: International Financial System

        Volume I brings together papers that analyse different regional aspects of evolving debt dynamics in the developing world, detailing many of the issues raised in this introduction in these specific contexts. It also introduces an additional, and often neglected, wider feature of these debt dynamics, namely the role of microdebt crises across the developing world and the bankruptcy of the microcredit model.

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        Do global standards and codes prevent financial crises? Some proposals (English)
        Discussion paper by Benu, Schneider, 2005, 59 pages
        Categories: International Economic Law, International Financial System

        What: After the crises in emerging market economies beginning with that of Mexico in the mid-90s, the adoption of internationally recognized standards and codes (S&C) of financial best practices came to be seen as a way to strengthen the international financial system. This paper evaluates the progress made so far and considers some of the basic assumptions of the S&C\\n initiative. In particular it examines how far S&C can be instrumental in preventing financial crises, and focuses on issues raised by the initiative from a developing-country perspective. Who: Can be used by a teacher on financial systems and policies. How: For a course on how to avoid or prevent financial crises in developing economies.

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        East Asia’s Counterweight Strategy: Asian Financial Cooperation and Evolving International Monetary Order (English)
        Discussion paper by Sohn, Injoo, 2007, 24 pages
        Categories: Emerging Economies and South South Cooperation, International Financial System

        In the aftermath of the Asian economic crisis, East Asian countries including ASEAN member states, China, Japan and the Republic of Korea, have increasingly sought to establish a regional system of financial cooperation. The study looks at the main drivers of this process and examines the progress made. The two key initiatives are the 'Chiang Mai initiative', which is designed to provide liquidity to member countries with short-run balance of payments problems and could develop into an Asian Monetary fund, and the 'Asian Bond Fund initiative', a regional bond market aiming to keep foreign reserves in the region and to reduce vulnerability to external financial shocks. The author also discusses the prospects and the challenges faced by the initiatives, such as regional economic diversity, geopolitical rivalry (in particular between Japan and China), and the relation to the IMF, the US and the EU. How: Describing East Asian responses to financial crisis, thus raising awareness about regional options in this area. Who: Policy makers in the field of regional and multilateral financial cooperation.

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        The Emerging of a Multilateral Forum for Debt Restructuring: The Paris Club, Discussion Paper No. 192 (English)
        Discussion paper by Cosio-Pascal, Enrique /UNCTAD, 2008, 40 pages
        Categories: Finance for Development, International Financial System

        This paper describes the evolution of intergovernmental relationships on debt rescheduling. It starts describing some experiences that aroused in the 18th Century and which negotiations were carried out, in many occasions, with the help of gunboat diplomacy. The settlement of liabilities that were created at the aftermath of the two 20th Century World Wars, which were – at least for some countries –- not exactly debt but war reparations, gave some insights in how to deal with these problems allowing the debtor country to find its own path to get out of the debt overhang. The settlement of these foreign liabilities may give some guidelines for dealing with debt restructuring in more general cases The creation of the Paris Club – which is a very civilized way to settle debt defaults compared to gunboat diplomacy – is analyzed and described here: first its emergency as an ad hoc transitory institution and later its evolution toward its definitive establishment in the international financial system landscape. It is also suggested that for a combination of events, which included the launch in Evian of the G-8’s so-called Evian Approach for the Paris Club, as well as the lack of support of some major industrialized countries to the implementation of a Sovereign Debt Restructuring Mechanism (SDRM), the Paris Club has become the only feasible international intergovernmental debt restructuring mechanism in spite of numerous shortcomings embodied in it. On this basis, some improvements of the actual mechanism are proposed, without precluding the possibility of the implementation of a more equilibrated SDRM in the future.

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        Enhancing the Role of Regional Development Banks, G-24 Discussion Paper Series No. 50 (English)
        Working paper by Griffith-Jones, Stephany; Griffith-Jones, David and Hertova, Dagmar / UNCTAD, 2008, 38 pages
        Categories: Emerging Economies and South South Cooperation, International Financial System

        There are a number of important reasons why lending by regional or sub-regional development banks can and should play an important and valuable complementary role in the international development architecture. We look at the specific strengths of multilateral, regional and sub-regional development banks and drawing on the successful experience of the European Investment Bank and the Andean Development Corporation conclude that the time is now for creating new regional development banks and expanding existing ones. Creating new institutions or expanding existing ones will have very clear benefits, as for instance providing regional public goods which are currently undersupplied, such as regional infrastructure. Very large pools of savings and foreign exchange reserves originate in developing countries these days and therefore the potential for a significant expansion of regional or sub-regional development banks, with only or mainly developing country members has grown significantly. At the same time, it may be desirable to create new regional development banks where gaps exist, however too much duplication of services is not desirable.

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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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        The Financial and Economic Crisis of 2008-2009 and Developing Countries (English)
        Book by UNCTAD, 2010, 340 pages
        Categories: Emerging Economies and South South Cooperation, Finance for Development, International Financial System

        Most analyses of the financial and subsequent economic crisis, including those by leading international institutions like the International Monetary Fund, have focused on OECD countries. This can give the (mistaken) impression that the developing world, even sub-Saharan Africa, has been less severely affected by the crisis and is recovering relatively quickly. Most developed countries’ governments are preoccupied with their domestic problems. This collection of papers puts the South on centre stage. It examines how the countries of the South were affected by the global economic and financial crisis and how they responded, what lessons the South could learn and what policy agenda needs to be pushed forward to better support the interests of developing countries, least developed countries as well as emerging-market economies.

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        Financial Regulation and Management of the Legal Risk. the Case of Alternative Investment Funds in the Eu. (English)
        Working paper by Michele Barbieri, 2018, 48 pages
        Categories: Finance for Development, International Financial System

        The last decade has witnessed a sharp increase of the regulatory requirements applicable to investment funds, in an attempt to ensure that their operations do not undermine financial stability but, on the contrary, might be beneficial to economic growth both in developing and developed countries. The increase of fund regulation, and of its complexity, has made it imperative for investment funds to develop appropriate systems and tools to properly manage legal risks. The paper presents a methodology that may be used to identify, in the alternative fund management industry, which are the main legal risks arising in each phase of the fund lifecycle. Furthermore, the paper indicates how these legal risks could be properly detected and mitigated.

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        Financing for Development (English)
        Book by UNCTAD, 2008, 68 pages
        Categories: Finance for Development, International Financial System

        The present publication is part of UNCTAD´s contribution to the Follow-up International Conference on Financing for Development to Review the Implementation of the Monterrey Consensus. The first part of the publication captures the outcome of the deliberations which transpired during the forty-fifth executive session of the Trade and Development Board, held on 13 November 2008. The report of the debate reflects the concerns of member States about the implementation of the Monterrey Consensus, especially the anxiety from the severe setback the global financial crisis was going to have on the development process. The second part of the publication contains an issues note, which reviews from UNCTAD´s development perspective, the six core aspects of the Monterrey Consensus. These range from mobilization of domestic resources for development, to flows of official development assistance, to coherence of the international monetary and financial systems. It may be pointed out that all these issues fell squarely within the domain of the work programme specified under the Accra Accord. The Annex to the note provides analysis of the current global financial crisis, the impact of which is being increasingly felt in the developing world, particularly in its most vulnerable segments.

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        Global Economic Crisis: Implications for Trade and Development (English)
        Report by UNCTAD secretariat, 2009, 42 pages
        Categories: International Financial System, Trade and Poverty

        The current global financial and economic crisis has the potential to seriously undermine all countries’ process of economic growth and transformation, and to jeopardize the efforts taken by developing and developed countries alike to promote the achievement of internationally agreed development goals. In addition to the ongoing global food crisis, volatile energy prices, and climate-change challenges, the current crises creates the most significant challenge facing the global community today – how to focus on buttressing development and poverty-reduction efforts globally and in developing countries, and on setting in place the conditions that will avert future crises and facilitate a sustainable process of economic transformation for all countries. This report by UNCTAD is an effort to contribute to consideration of this major challenge, with a view to identifying policies and strategies that can serve as the bulwark on which to restore confidence, build recovery, and promote inclusive development.

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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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        Global Economic Prospects 2013: Assuring Growth Over the Medium Term (English)
        Report by The World Bank, 2013, 169 pages
        Categories: International Financial System, Trade Policy Analysis and Trade Data Sources

        This report examines growth trends for the global economy and how they affect developing countries. It includes three-year forecasts and long-term global economic prospects and long-term global scenarios which look ten years into the future. Topical analyses cover financial markets, industrial production, global trade, inflation, exchange rates and commodities.

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        Global Imbalances: The Choice of the Exchange Rate-indicator is Key (English)
        Policy brief by UNCTAD, 2011, 2 pages
        Categories: International Financial System, Policy Reviews and Briefs

        The path towards a more stable, balanced and equitable global economy received an important boost in recent days. In December 2010 in Seoul, the G-20 leaders acknowledged the need for a co-ordinated multilateral response to global trade imbalances and asked for “indicative guidelines composed of a range of indicators” which “would serve as a mechanism to facilitate timely identification of large imbalances that require preventive and corrective action to be taken”(paragraph 9 of the Seoul Summit Declaration). This is very much in line with UNCTAD's recent proposals (see, for example, Policy Brief No 17, published prior to the summit). UNCTAD recommended the use of the Real Effective Exchange Rate (REER) as a practical and effective indicator to differentiate between sustainable and unsustainable trade imbalances. This policy brief argues that a REER based on unit labour costs (the premium of nominal wages over productivity for the economy as a whole) is better suited to grasp changes in competitiveness than one based on consumer price inflation. The latter misses out important elements of the catching-up process of developing countries and may result in significant misinterpretation for some important emerging economies like China.

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        Global Rebalancing: Effects on Trade Flows and Employment
        Study by UNCTAD, 2010, 48 pages
        Categories: International Financial System, Trade Policy Analysis and Trade Data Sources

        The persistently large imbalances in the world economy contributed to the outbreak of the current economic and financial crisis and facilitated its global spread. While global imbalances declined in the immediate aftermath of the crisis, they have been widening again with the ongoing recovery of the world economy. Global current-account imbalances are not necessarily undesirable. However, there is widespread agreement that the current imbalances are unsustainable. This paper examines the effects on trade flows and employment that global rebalancing might entail.

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        Global Value Chains and Development: Investment and Value Added Trade in the Global Economy (English)
        Report by UNCTAD, 2013, 40 pages
        Categories: International Financial System, Investment, Trade Policy Analysis and Trade Data Sources

        This study presents the value-added patterns in the global economy and in the developing world. It looks at the global value chains (GVCs) and their increasing complexity, which often results in distorted statistics on global trade due to double counting. The report estimates that the value chains administered in various ways by transnational corporations (TNCs) now account for 80 percent of global trade. Moreover, the data shows that developing countries are participating more and more in GVCs and this can play an important role in economic growth in the future. In addition, the report states that the balance of opportunities and risks associated with GVCs makes it important for governments to carry out well-informed policy debates on GVCs’ development impacts.

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        The Growing Interdependence Between Financial and Commodity Markets (English)
        Discussion paper by Mayer, Jörg/UNCTAD, 2009, 34 pages
        Categories: Commodities, International Financial System

        Financial investment has become increasingly important on commodity exchanges. This paper distinguishes two types of financial investors and emphasizes differences in their position taking motivation and price impacts. Index traders follow a passive strategy holding virtually only long positions. Money managers trade on both sides of the market and attempt to maximize short-term returns. Regression analysis indicates that: (i) index trader positions are particularly influenced by roll returns, while money managers emphasize spot returns; and that: (ii) money managers moved from emphasizing diversification to a more speculative strategy by taking commodity positions that are positively, rather than negatively, related to developments in equity markets. Granger-causality tests indicate that these differences translate into different price impacts: (i) index trader positions have a causal price impact particularly for agricultural commodities; and (ii) money managers had a causal impact during the sharp increases in the prices for some non-agricultural commodities.

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        IIA Issues Note No. 1/2013: Recent Developments in Investor-state Dispute Settlement (English)
        Note by UNCTAD, 2013, 36 pages
        Categories: International Economic Law, International Financial System, Investment

        This issue note analyses the recent developments in investor state dispute settlement (ISDS). As the public discourse about the usefulness and legitimacy of the ISDS mechanism is gaining momentum, reform options with respect to their feasibility, expected effectiveness and implementation methods remains wanting. The note advocates a multilateral policy dialogue to help to develop a consensus about the preferred course for reform and ways to put it into action.

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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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        The Impact of the Financial and Economic Crisis on Debt Sustainability in Developing Countries
        Note by UNCTAD, 2009, 24 pages
        Categories: Finance for Development, International Financial System

        This paper is prepared in response to a request by the former President of the General Assembly H.E. Miguel d´Escoto dated 6 July 2009 for UNCTAD to prepare a paper on the impact of the crisis on debt sustainability. Furthermore, this paper is a contribution to the follow up of the United Nations Conference on the World Financial and Economic Crisis and its Impact on Development held in June 2009. The paper is divided into three parts. The first part (Section 2) describes the impact of the crisis on developing countries. It shows that this crisis has demonstrated, once again, the vulnerability of developing countries to exogenous shocks and that the global downturn raises concerns with regard to the capacity of developing countries to weather the storm without laying the foundations for a debt crisis in the years to come. In this context, it is essential for policy makers to be aware of key determinants of debt sustainability and how they have evolved over the last two years. However, debt sustainability should not be viewed as simply the capacity to continue servicing debt obligations without taking into account the fact that higher debt serving costs necessarily mean fewer funds available for fighting poverty and meeting MDGs. The second part of the paper (Sections 3) shows that developing countries suffer debt crises with debt levels which, for the standard of the advanced economies, are relatively low (a phenomenon often referred to as debt-intolerance). The paper rejects the conventional wisdom that this phenomenon is due to poor policies or institutions and argues that the key determinants of debt intolerance are the economic and debt structure of developing countries. The third part of the paper (Section 4) discusses international and domestic long-term policies aimed at reducing the probability of debt crises. This section also points out that, even with better policies, debt crises and sovereign defaults are bound to happen and that the cost of such crises could be attenuated by putting in place an international debt resolution mechanism which would allow a speedy, equitable and transparent debt restructuring process.

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        Internationalization of Finance and Changing Vulnerabilities in Emerging and Developing Economies
        Report by Akyüz, Yılmaz /UNCTAD, 2014, 72 pages
        Categories: International Financial System

        This paper analyses the salient features of the recent pace and pattern of integration of major Emerging and Developing Economies (EDEs) into the global financial system and their changing vulnerabilities to external financial shocks. In discussing the pattern of integration and the associated vulnerabilities, the paper focuses on the size and composition of gross external balance sheets, particularly gross liabilities.

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        International Trade After the Economic Crisis: Challenges and New Opportunities
        Study by UNCTAD, 2010, 158 pages
        Categories: International Financial System, Trade Policy Analysis and Trade Data Sources

        The purpose of this year’s UNCTAD-JETRO joint research is to investigate the new economic realities in international trade that are evident particularly after the 2008 financial crisis, and to highlight the issues that are key to the future of pro-trade as well as pro-development international trading system.

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        International Trade and Real Transmission Channels of Financial Shocks in Globalized Production Networks (English)
        Working paper by Escaith, Hubert, Gonguet, Fabien, 2009, 33 pages
        Categories: International Financial System, Trade Policy Analysis and Trade Data Sources

        The article analyses the role of international supply chains as transmission channels of a financial shock. Because individual firms are interdependent and rely on each other, either as supplier of intermediate goods or client for their own production, an exogenous financial shock affecting a single firm, such as the termination of a line of credit, reverberates through the productive chain. The transmission of the initial financial shock through real channels is tracked by modelling input-output interactions. The paper indicates that when banks operate at the limit of their institutional capacity, defined by the capital adequacy ratio, and if assets are priced to market, then a resonance effect amplifies the back and forth transmission between real and monetary circuits. The paper illustrates the proposed methodology by computing a supply-driven indicator (IRSIC) and indirect demand-driven impacts on five interconnected economies of different characteristics: China, Japan, Malaysia, Thailand and the United States.

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        The Least Developed Countries Report 2004, Part 1, Chapter 1: Recent Economic Trends (English)
        Report by UNCTAD, 2004, 24 pages
        Categories: Finance for Development, International Financial System

        What: A thorough overview of the background, consequences and political implications of Africa's debt crisis with a focus of the Highly Indebted Poor Countries Initiative (HIPC). Divided into 4 chapters looking at the key issues involved in the HIPC, eligibility and sustainability, debt after debt-relief and new approaches to attaining sustainable debt. Who: Relevant to development economists or anyone interested in both HIPC and wider debt issues and their impact on development. How: In its entirety, could be used as background reading. Discreet chapters could also be of relevance for specific discussions or assignments. Chapter 4 on new approaches provides ideas for alternative policy approaches.

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        Multilateral Indexed Loans And Debt Sustainability
        Discussion paper by Alessandro Missale, Emanuele Bacchiocchi, 2012, 50 pages
        Categories: Finance for Development, International Financial System

        This study focuses on the potential for introducing indexation on loans provided by multilateral lenders to low income countries (LICs) and examines whether a reform of their lending policy is feasible and economically justified. It provides new evidence for a group of 40 international development association (IDA) countries over the 1990–2010 period for three types of debt: (i) foreign currency loans indexed to real gross domestic product (GDP); (ii) foreign currency loans indexed to the dollar value of exports; and (iii) inflation-indexed loans denominated in local currency. The study finds that both GDP indexation and domestic currency lending are feasible policies. However, the analysis shows that ‘one size fits all solution’ does not exist to the problem of stabilizing the debt ratio, making a reform of multilateral lending, desirable to all LICs, difficult to implement.

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        New and Traditional Trade Flows and the Economic Crisis (English)
        Report by Nicita, Alessandro, Tumurchudur-Klok, Bolormaa, 2011, 24 pages
        Categories: International Financial System, Trade Policy Analysis and Trade Data Sources

        In terms of economic development, it makes a difference whether export increases at the extensive (new trade flows) or intensive margin (traditional, well-established trade flows). Similarly, a decline in international trade may affect new flows relatively more than traditional ones. A more severe impact on new trade flows could impose additional obstacles to recovery for those countries relying on export diversification for their economic development. This paper seeks to determine whether the recent decline in international trade has affected relatively more trade at the extensive margin or at the intensive margin. The overall results indicate that the economic crisis of 2008 and 2009 has had more severe implications for those bilateral trade flows that did not exist before 2006. New bilateral flows have a lower probability of surviving the fall in demand and relatively higher negative effects on their volumes of trade. Consequently, the economic crisis may also affect the global economy by producing delays in the international product cycle, with traditional and larger exporters holding ground in a relatively better way than new entrants.

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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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        Price Formation in Financialized Commodity Markets - The Role of Information (English)
        Report by UNCTAD, 2011, 80 pages
        Categories: Commodities, International Financial System

        This study asserts that the role of information is crucial for price developments in commodity derivative markets. It demonstrates that the traditional approach of efficient market hypothesis (EMH)does not apply for present commodity futures markets. Trading decisions are taken in an environment of considerable uncertainty, where traders engage in "intentional herding" and do not base their transactions on information about fundamentals. This analysis also advocates several policy responses to improve market functioning such as increased transparency with respect to fundamentals, increased transparency in the exchanges and OTC markets, tighter regulation of financial players and the introduction of a transaction tax system.

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        Quantification of the High Level of Endogeneity and of Structural Regime Shifts in Commodity Markets (English)
        Discussion paper by Filimonov,Vladimir; Bicchetti, David; Maystre, Nicolas; Sornette ,Didier, 2013, 46 pages
        Categories: Commodities, International Financial System

        This paper proposes a “reflexivity” index that quantifies the relative importance of short-term endogeneity/reflexivity for several commodity futures markets (corn, oil, soybeans, sugar, and wheat) and a benchmark equity futures market. The authors use a reflexivity index that is defined as the average ratio of the number of price moves that are due to endogenous interactions to the total number of all price changes, which also include exogenous events. Estimated reflexivity levels are obtained by calibrating the Hawkes self-excited conditional Poisson model on time series of price changes. The Hawkes model accounts simultaneously for the co-existence and interplay between the exogenous impact of news and the endogenous mechanism by which past price changes may influence future price changes. Robustness tests show that the index provides a ‘pure’ measure of endogeneity that is independent of the rate of activity, order size, volume or volatility. The authors find an overall increase of the reflexivity index since the middle of the first decade of the 21st century to October 2012, which implies that, on a monthly basis, at least 60–70 per cent of commodity price changes are now due to self-generated activities rather than novel information, compared to 20–30 per cent earlier. While their reflexivity index is defined on short-time windows (10 minutes) and thus does not capture long-term memory, they discover striking coincidence between its dynamics and that of the price hikes and abrupt falls that developed since 2006 and culminated in early 2009.

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        A re-examination of the architecture of the international economic system in a global setting: issues and proposals (English)
        Discussion paper by Sakbani, Michael / UNCTAD, 2006, 32 pages
        Categories: Globalization and Development Strategies, International Financial System

        The globalization of the world economy poses major challenges to the prevailing international economic system. The recent trade-investment system raises the issues of the marginalization of countries, firms, and agents if they are not capable to compete with large successful entities. The system engenders conflicts of interest in its interfacing with sovereign domains. In numerous cases such as employment and mutual trade benefits, it can produce zero sum outcomes. Consequently, significant segments of public opinion in many countries have mobilized against it. In the monetary and financial area, the system has from 1945 evolved on a piecemeal and ad hoc basis. In recent years, it has not been able to predict, prevent or effectively deal with financial crisis. It demonstrates a lacuna in global financial governance especially with respect to enforcing its rules on the major countries and bringing the private sector therein. The central institution, the IMF, is shown to be in need of basic reforms involving forging a global vision, reconsidering and updating conditionality, further democratization of political governance, and revamping the exchange rates and surveillance functions.

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        Report of the Commission of Experts of the President of the United Nations General Assembly on Reforms of the International Monetary and Financial System (Stiglitz Report) (English)
        Report by United Nations, 2009, 140 pages
        Categories: International Financial System

        The essential insight of the report is that our multiple crises are not the result of a failure or failures of the system. Rather, the system itself – its organization and principles, and its distorted and flawed institutional mechanisms – is the cause of many these failures. The major focus of this report is on short-term measures and the longer-term reforms of the international financial system that support the developing countries and their aspirations for development. This report thus calls for a substantial increase in resources available to developing countries, not just to undertake stimulus measures, but to cope with the negative impact of the crisis.

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        Responding to the Challenges Posed by the Global Economic Crisis to Debt and Development Finance
        Report by UNCTAD, 2010, 120 pages
        Categories: Finance for Development, International Financial System

        This report is submitted to the General Assembly in accordance with paragraph 4 of Assembly resolution. It includes a comprehensive analysis of the external debt situation and debt-servicing problems of developing countries and transition economies. It aims to describe new developments and key trends in external debt and related areas of development finance and to provide a basis for deliberation of related policy issues.

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        Restoring Trade Finance During A Period Of Financial Crisis : Stock-taking Of Recent Initiatives (English)
        Working paper by Auboin, Marc, 2009, 25 pages
        Categories: International Financial System

        While a number of public-institutions mobilized financial resources for trade finance in the fall of 2008, this has not been enough to bridge the gap between supply and demand of trade finance worldwide. As the market situation continued to deteriorate in the first quarter of 2009, G-20 leaders in London (April 2009) adopted a wider package for injecting additional liquidity and bringing public guarantees in support of $250 billion of trade transactions in 2009 and 2010. Ahead of the Pittsburgh Meetings, experts reported that more than the targeted amount had been mobilized. In the meantime, through the summer and the fall of 2009, the market situation seemed to have eased – although in many countries, access to trade finance by the smaller traders had become either significantly more expensive or had simply disappeared. One can expect the trade finance market to have its up and downs for some time, because lending for trade is a function of the general lending situation of commercial banks. The paper discusses longer-term initiatives aimed at improving the resilience of the trade finance market to short-term and longer-term shocks.

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        The Role of the IMF in Debt Restructurings: Lending into Arrears, Moral Hazard and Sustainability Concerns (English)
        Discussion paper by Simpson, Lucio /University of Buenos Aires, 2006, 40 pages
        Categories: Finance for Development, International Financial System

        This paper will discuss the role that the IMF plays in sovereign debt restructurings and its views regarding the various components of the framework for crisis prevention and resolution, with a special emphasis on LIA policy and the issue of debt sustainability. Because the SDRM was originally intended to be one of the pillars of such framework and because of the consequences of the debate it generated, the first section examines the reasons that explain the failure of the SDRM project to make progress. The second section comments on the recent widespread adoption of CACs, to a large extent as a result of the threat posed by the possible implementation of the SDRM. Sections three to six deal with LIA policy. They explain the objectives and implications of LIA policy as well as its evolution over time, discussing the suitability of the criteria that regulate its implementation, how the policy has been applied in practice and the relevance of the moral hazard problems that it might generate. In section seven, and against the background of the trade-off between investor-friendliness and debt sustainability, the potential positive role that the IMF could play in debt restructurings is discussed and is contrasted with the Fund’s failed experience in Argentina and its bailout of Uruguay, which was clearly inconsistent with its own rules.

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        Speculative Influences on Commodity Futures Prices 2006-2008 (English)
        Discussion paper by Gilbert, Christopher L. / UNCTAD, 2010, 40 pages
        Categories: Commodities, International Financial System

        This paper examines the possible price impact of speculative bubbles and index-based investment activity on commodity futures prices over 2006–2008. Emphasis is put on crude oil, three nonferrous metals (aluminium, copper and nickel) and three agricultural commodities (wheat, corn and soybeans). There is significant evidence for periods of explosive bubble behaviour in the copper market where three separate bubbles are identified (plus a bubble in the soybeans market), whereas the evidence for bubble behaviour is weaker for crude oil and nickel. Aluminium, corn and wheat appear to have been bubble-free. The author also examines the effects of index-based investment on the same markets, and finds strong evidence that index-based investment did contribute to the rises in oil and metals prices over 2006–2008 but weaker evidence for similar effects on grains prices.

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        The State of Commodity Dependence in 2012 (English)
        Manual by UNCTAD, 2012, 126 pages
        Categories: Commodities, International Financial System, Trade Policy Analysis and Trade Data Sources

        This document aims to provide an individual country overview of the commodity-related situation of 154 developing countries. This publication also contains graphs which present a regional and global perspective of commodity dependence in the developing world over the period 2009–2010.

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        The Synchronized and Long-lasting Structural Change on Commodity Markets: Evidence from High Frequency Data (English)
        Working paper by Bicchetti, David and Maystre, Nicolas / UNCTAD, 2012, 35 pages
        Categories: Commodities, International Financial System

        This paper analyses the intraday co-movements between returns on several commodity markets and on the stock market in the United States over the 1997- 2011 period. By exploiting a new high frequency database, we compute various rolling correlations. Using this database, we document a synchronized structural break, characterized by a departure from zero, which starts in the course of 2008 and continues thereafter. This is consistent with the idea that recent financial innovations on commodity futures exchanges, in particular the high frequency trading activities and algorithm strategies have an impact on these correlations.

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        Trade and Development Report, 1981-2011: Three Decades of Thinking Development (English)
        Report by UNCTAD, 2012, 138 pages
        Categories: Globalization and Development Strategies, International Financial System

        This review traces the key issues relating to the global economy and development strategies that have been addressed in UNCTAD’s Trade and Development Reports (TDRs) over the past three decades. It also intends to show how ideas, opinions and proposals expressed in the TDR, and the analytical approaches used, differed from those of proponents of “the mainstream” and how they evolved in response to new challenges arising from developments in the world economy.

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        Trade and Development Report 1998: International financial instability and the East Asian crisis (English)
        Report by UNCTAD, 1998, 59 pages
        Categories: Globalization and Development Strategies, International Financial System

        This chapter of the Trade and Development Report 1998 seeks to explain the East Asian crisis of 1997 in the context of the increase in systemic global financial instability. It examines various elements that have characterized financial crises since 1970, identifying the factors that have created financial vulnerability in East Asia and spread it throughout the region and globally. It argues that there is clear evidence that the policy response to the 1997 crisis contributed to its severity, and sets out the social consequences of the crisis. The chapter concludes with a brief discussion of the general implications of the crisis for the East Asian model of economic development. Who: For lecturers, researchers and/or students of finance. How: A very good reading material on international financial instability. The report provides lots of reference materials.

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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 2004, Chapter II: International Trade and Finance (English)
        Report by UNCTAD, 2004, 32 pages
        Categories: Globalization and Development Strategies, International Financial System

        What: This chapter analyses international trade and financial and monetary systems. The report asserts that global trade increased significantly in 2003, after sluggish growth in 2002 and a slight contraction in 2001. However, the trade expansion was mainly the result of high export volumes and the growth rate in 2003 was characterized by a surge in the unit value of exports. In addition, the report examines how the international trading relations are affected by the international monetary and financial systems, and shows that monetary and financial instability can have a serious impact on the ability of developing countries to participate successfully in the international trading system and reap the benefits of globalization. Who: or anyone teaching and researching international trade and global monetary and financial systems. How: A chapter that can be used to teach and/or undertake research work on international trade, finance and monetary issues.

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        Trade and Development Report 2004, Chapter IV: Fostering Coherence between the International Trading, Monetary and Financial Systems (English)
        Report by UNCTAD, 2004, 52 pages
        Categories: International Financial System

        What: This chapter examines the problem of insufficient coherence between the international trading, monetary and financial systems, and how it affects the formulation and successful implementation of national development strategies. Finally, the chapter draws some conclusions on how developing-country policy-makers can avoid a situation where insufficient coherence in the international monetary and financial system jeopardizes the successful implementation of national development strategies designed to foster domestic supply capacities. In addition, this chapter has two annexes dealing with "The Concept of Competitiveness" and "The Set-up of Econometric Estimates of the Impact of Exchange Rate Changes on Trade Performance". Who: For anyone teaching and/or researching international trading, monetary and financial systems. How: Can be used to teach and/or undertake research as well as a background reading on coherence between the international trading, monetary and financial systems.

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        Trade and Development Report 2004: Conclusions and Policy Challenges (English)
        Report by UNCTAD, 2004, 10 pages
        Categories: Globalization and Development Strategies, International Financial System

        What: The Trade and Development Report 2004, Part Two, in its concluding remarks, raises a number of policy issues and challenges as to, for instance. how to reinforce coherence between national development strategies and global processes and disciplines, as well as policy coherence among and within the various aspects/sectors of the global economy that impact on development prospects of developing countries. Of particular importance, the report notes, is the interface between the international trading system and the international monetary and financial systems. Who: For teachers focusing on international trading, monetary and financial systems. How: The various issues and proposals can be used to provoke discussions in class.

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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 2005, Chapter 1: Current issues in the world economy (English)
        Report by UNCTAD, 2005, 47 pages
        Categories: Globalization and Development Strategies, International Financial System

        What: This chapter of UNCTAD's flagship annual Report on Trade and Development 2005 analyses the current trends of the world economy. The report warns that though the world economy is expanding there are serious risks of a relapse. It examines the generally modest growth performance of the developed countries on one hand and conversely the generally good economic growth of the developing countries in general and particularly the two most populous Asian countries. Who: A very useful report for anyone teaching and researching to analyse the current world-wide economic trends and issues. How: A chapter that can be used to teach and/or undertake research work on present-day economic trends and issues.

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        Trade and Development Report 2005, Chapter II: Income growth and shifting trade patterns (English)
        Report by UNCTAD, 2005, 52 pages
        Categories: Globalization and Development Strategies, International Financial System

        What: In this chapter, the report deals with how both the sustained rapid growth and rising living standards in a number of Asian countries have been accompanied by a dramatic increase of the region's shares in world exports and raw material consumption. Moreover, combined with their rapid growth, the greater integration of these countries into the world trading system has created new export opportunities for many developed and other developing countries. In addition this growth also signifies an important progress towards achieving the Millennium Development Goal of halving global poverty by 2015. Who: For anyone teaching and researching how the recently fast developing countries income growth and rising living standards is transforming their societies. How: Can be used to teach and/or research on economic development.

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        Trade and Development Report 2005: New features of global interdependence (English)
        Report by UNCTAD, 2005, 204 pages
        Categories: Emerging Economies and South South Cooperation, Globalization and Development Strategies, International Financial System

        What: This year's UNCTAD flagship Trade and Development Report 2005 questions the sustainability of the current global economic expansion and the realization of the MDGs in certain regions of the world. Although the rapid growth in China and India has made these two giants to become the second engine of worldwide growth; the United States record deficit, on the other hand, raises questions about the stability of the global financial system and the sustainability of global growth. The report asserts that a new form of global economic interdependence is taking shape mainly as a result of the increasing weight of the rapidly growing Asian developing economies. Who: A very useful report for anyone teaching and researching current world-wide economic trends and issues. How: An authoritative report that can be used as teaching and/or researching material for courses or research work on trade, investment and development.

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        Trade and Development Report 2009 - Responding to the Global Crisis. Climate Change Mitigation and Development (English)
        Report by UNCTAD, 2009, 218 pages
        Categories: Globalization and Development Strategies, International Financial System, Trade and Environment

        The Trade and Development Report series explores current economic trends and major policy issues of international concern, and makes suggestions for addressing these issues at various levels. This year's report analyses the ongoing global financial and economic crisis. It looks at the channels through which the crisis is spreading from developed countries to developing and transition economies. It examines the short-term policy responses of governments and discusses their respective advantages and disadvantages. By conducting an in-depth analysis of the causes and contributing factors of the current crises it emphasizes the need for a reform of the monetary and financial system both on the national and the international level. Given the pressing preoccupation with global warming, the report also addresses the question of how forward-looking development strategies and rapid growth in developing countries can be reconciled with climate change mitigation.

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        Trade and Development Report 2009 - Responding to the Global Crisis. Climate Change Mitigation and Development - Overview English (English)
        Summary by UNCTAD, 2009, 22 pages
        Categories: Globalization and Development Strategies, International Financial System, Trade and Environment

        The Trade and Development Report series explores current economic trends and major policy issues of international concern, and makes suggestions for addressing these issues at various levels. This year's report analyses the ongoing global financial and economic crisis. It looks at the channels through which the crisis is spreading from developed countries to developing and transition economies. It examines the short-term policy responses of governments and discusses their respective advantages and disadvantages. By conducting an in-depth analysis of the causes and contributing factors of the current crises it emphasizes the need for a reform of the monetary and financial system both on the national and the international level. Given the pressing preoccupation with global warming, the report also addresses the question of how forward-looking development strategies and rapid growth in developing countries can be reconciled with climate change mitigation.

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        Trade and Development Report 2015: Making the international financial architecture work for development (English)
        Also available in Chinese
        Report by UNCTAD, 2015, 221 pages
        Categories: Finance for Development, International Financial System

        This report reviews recent trends in the global economy and focuses on ways to reform the international financial architecture. It warns that with a tepid recovery in developed countries and headwinds in many developing and transition economies, the global crisis is not over, and the risk of a prolonged stagnation persists. The report also identifies some of the critical issues to be addressed in order to establish a more stable and inclusive international monetary and financial system which can support the development challenges over the coming years. It considers existing shortcomings, analyses emerging vulnerabilities and examines proposals and initiatives for reform.

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        Trade and Development Report 2015: Making the international financial architecture work for development - Overview (English)
        Also available in Arabic, Chinese, French, Russian, Spanish
        Summary by UNCTAD, 2015, 39 pages
        Categories: Finance for Development, International Financial System

        This report reviews recent trends in the global economy and focuses on ways to reform the international financial architecture. It warns that with a tepid recovery in developed countries and headwinds in many developing and transition economies, the global crisis is not over, and the risk of a prolonged stagnation persists. The report also identifies some of the critical issues to be addressed in order to establish a more stable and inclusive international monetary and financial system which can support the development challenges over the coming years. It considers existing shortcomings, analyses emerging vulnerabilities and examines proposals and initiatives for reform.

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        UNCTAD Policy Brief No.1/2007: Coping with Financial Market Crisis (English)
        Policy brief by UNCTAD, 2007, 2 pages
        Categories: International Financial System, Policy Reviews and Briefs

        Turmoil on the financial markets is back. Despite the fact that some policy measures were effective in stabilizing the interbank market, several observers have criticized the actions of the US Federal Reserve and of the European Central Bank. Although at first glance these criticisms may seem warranted, their fundamental thrust appears to be flawed. This policy brief raises some issues to discuss how to cope with financial market crisis.

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        UNCTAD Policy Brief No. 1/2012: The Paradox of Finance-driven Globalization (English)
        Policy brief by UNCTAD, 2012, 4 pages
        Categories: Globalization and Development Strategies, International Financial System, Policy Reviews and Briefs

        Over the past thirty years, many developing countries have experienced spurts of economic growth followed by collapses. In the process, some have fallen further behind the advanced economies, while only a few have enjoyed sustained economic growth. This policy brief explores the reasons for these diverse outcomes. It suggests that the countries with the strongest performance are those that have rejected the dominant economic wisdom of trusting their growth prospects to financial markets, and instead have pursued innovative and heterodox policies, tailored to local conditions. This has allowed them to shift resources to activities that are increasingly productive. Meanwhile, many developing countries that have embraced finance-driven globalization (FDG) have seen their ability to achieve this structural transformation greatly reduced.

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        UNCTAD Policy Brief No. 12/2010: Global Monetary Chaos: Systemic Failures Need Bold Multilateral Responses (English)
        Policy brief by UNCTAD, 2010, 2 pages
        Categories: International Financial System, Policy Reviews and Briefs

        Amidst continued financial crisis, the question of the global trade imbalances is back high on the international agenda. A procession of prominent economists, editorialists and politicians have taken it upon themselves to “remind” the surplus countries, and in particular the country with the biggest surplus, China, of their responsibility for a sound and balanced global recovery. The generally shared view is that this means permitting the value of the renminbi to be set freely by the “markets”, so that the country will export less and import and consume more, hence allowing the rest of the world to do the opposite. But is it reasonable to put the burden of rebalancing the global economy on a single country and its currency? This policy brief contends that the decision to leave currencies to the vagaries of the market will not help rebalance the global economy. It argues that the problem lies in systemic failures, and as such, requires comprehensive and inclusive multilateral action.

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        UNCTAD Policy Brief No. 17/2010: Building a global monetary system, the door opens for new ideas (English)
        Policy brief by UNCTAD, 2010, 2 pages
        Categories: International Financial System, Policy Reviews and Briefs

        Proposals to avert exchange rate chaos and to reshape the international monetary system have received new impetus recently. For the first time since the end of the Bretton Woods system, a proposal has been tabled to resolve unsustainable global trade imbalances through a multilateral solution. The initiatives under discussion by the G-20 to ensure greater order in international monetary affairs are an implicit recognition that the market cannot solve a major problem that has been blocking the smooth integration of all countries into the globalized economy. UNCTAD research supports this view. Indeed, UNCTAD has consistently shown that without a multilateral approach, it will neither be possible to reap the benefits of an intensified global division of labour, nor to avoid devastating international financial crises of the kind that have been seen in the last two decades.

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        UNCTAD Policy Brief No. 4/2008: Rebuilding Financial Multilateralism (English)
        Policy brief by UNCTAD, 2008, 2 pages
        Categories: International Financial System, Policy Reviews and Briefs

        With world markets absorbing the first waves of the continuing financial crisis, attention is shifting to ways to collectively manage the unwinding of global imbalances and prevent systemic turmoil. This policy brief argues that global cooperation and global regulation are imperative in both trade and finance, and that the United Nations is the most credible international organization to spearhead the design, discussion and launching of such efforts.

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        UNCTAD Trade and Development Report 1998, Chapter III: International financial instability and the East Asian crisis (English)
        Report by UNCTAD, 1998, 26 pages
        Categories: International Financial System

        This chapter of the Trade and Development Report 1998 seeks to explain the East Asian crisis of 1997 in the context of the increase in systemic global financial instability. It examines various elements that have characterized financial crises since 1970, identifying the factors that have created financial vulnerability in East Asia and spread it throughout the region and globally. It argues that there is clear evidence that the policy response to the 1997 crisis contributed to its severity, and sets out the social consequences of the crisis. The chapter concludes with a brief discussion of the general implications of the crisis for the East Asian model of economic development. Who: For lecturers, researchers and/or students of finance. How: A very good reading material on international financial instability. The report provides lots of reference materials.

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        UNCTAD Trade and Development Report 1998, Chapter IV: The management and prevention of financial crises (English)
        Report by UNCTAD, 1998, 28 pages
        Categories: International Financial System

        What: With a special focus on developing countries this report discusses the causes of financial crises and the consequences on international markets volatility, it argues that in the absence of a global mechanism for capital flows stabilization financial instability will remain in all countries. Who: This report from 1998 is an essential reading to understand mechanisms of financial crises. However

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        UNCTAD Trade and Development Report 1999, Chapter III - International financial markets: instability, trends and prospects (English)
        Report by UNCTAD, 1999, 24 pages
        Categories: International Financial System

        What: Quantitative analysis of the effects of financial crises on international trade through a comparison between the Asian, Russian and Brazilian crises. Who: For anyone studying the financial system and particularly the consequences of financial deregulation. How: Key document to understand financial crises mechanisms that could be used as the basis of a student's work or a lecture.

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        UNCTAD Trade and Developoment Report 2005 - Overview (English)
        Summary by UNCTAD, 2005, 28 pages
        Categories: Commodities, International Financial System, Trade Policy Analysis and Trade Data Sources

        What: This resource provides a brief summary of the UNCTAD flagship report. This important annual resource analyses current economic trends and major policy issues of international concern, and makes suggestions for addressing these issues at various levels. This year the report looks at, among other things, the effect of rising oil prices on global growth, domestic resources and balance of payments constraints in Asia, trends in the terms of trade and new forms of global interdependence, including the growing importance of developing countries in global markets. Who: Essential background reading for anyone looking at the impact of trade on development.

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        Unraveling the Underlying Causes of Price Volatility in World Coffee and Cocoa Commodity Markets (English)
        Discussion paper by Maurice, Noemie Eliana, Davis, Junior / UNCTAD, 2011, 43 pages
        Categories: Commodities, International Financial System, Trade Policy Analysis and Trade Data Sources

        In recent years, Commodity Dependent Developing Countries (CDDCs) have faced multiple global food, energy and climate crises, compounded by the recent financial and economic crises, which have increased their vulnerability to excessive price volatility in commodity markets. Moreover, structural vulnerabilities in most CDDCs render their economies more vulnerable to increased commodity market turbulence than developed countries, given their comparatively lower income and high dependence on commodity exports. Therefore, this paper empirically examines the patterns and underlying causes of excessive price volatility for two major soft commodities of critical importance to many of the poorest CDDCs: coffee and cocoa. It aims to identify interactions, similarities and causalities between coffee and cocoa prices on the one hand and, oil and futures prices on the other hand. Our analysis of coffee and cocoa historical prices shows that, coffee price volatility has uneven or differing reactions depending on the nature of the market shock. Oil price spillover effects on coffee and cocoa markets are also assessed using cointegration and causality models. Long-run causality is found between oil prices, and coffee and cocoa prices but, only cocoa has an equilibrium relationship with oil in the longterm. Given the results, this study proposes some policy recommendations for managing price risk and addressing regulation in cocoa and coffee exporting countries

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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 Trade Statistical Review 2016 (English)
        Report by WTO, 2016, 165 pages
        Categories: International Financial System, Trade Policy Analysis and Trade Data Sources, WTO Issues/Multilateral Trading System

        The 2016 World Trade Statistical Review provides an overview of current trends in world trade and policy developments. This year's publication uses statistics within a global economic context to explain the reasons how and why global trade is changing. It provides comprehensive data with a particular focus on trade policy, the participation of developing economies in world trade and a more detailed look at selected goods and services.

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