Capital Flows

Research Paper 50, February 2014

Crisis Mismanagement in the United States and Europe: Impact on Developing Countries and Longer-Term Consequences

There are two major failings in policy interventions in the crisis in the US and Europe: the reluctance to remove the debt overhang through timely, orderly and comprehensive restructuring and the shift to fiscal austerity after an initial reflation.  These have resulted in excessive reliance on monetary means with central banks entering uncharted policy waters, including zero-bound interest rates and the acquisition of long-term public and private bonds.  (more…)

SouthViews No. 102, 4 February 2014

New economic crisis engulfing South countries

By Martin Khor

A new economic crisis is engulfing several developing countries which face sharp currency depreciation and capital outflows. This is caused by the boombust cycles in capital flows originating in profit-seeking investor behaviour in developed countries. (more…)

Research Paper 48, June 2013

Waving Or Drowning: Developing Countries After The Financial Crisis

Not only has the “Great Recession” led to a “Great Slowdown” in developing countries, but also their longer-term growth prospects are clouded by global structural imbalances and fragilities that culminated in the current crisis. (more…)

Paper on Public Expenditures and Adjustment Measures, March 2013

The Age of Austerity: A Review of Public Expenditures and Adjustment Measures in 181 Countries.

This paper: (i) examines the latest IMF government spending projections for 181 countries by comparing the four distinct periods of 2005-07 (pre-crisis), 2008-09 (crisis phase I: fiscal expansion), 2010-12 (crisis phase II: onset of fiscal contraction) and 2013-15 (crisis phase III: intensification of fiscal contraction); (ii) reviews 314 IMF country reports in 174 countries to identify the main adjustment measures considered in high-income and developing countries; (iv) discusses the threats of austerity to development goals and social progress; and (v) calls for urgent action by governments to adopt alternative and equitable policies for socio-economic recovery. (more…)

Policy Brief 15, January 2013

Capital Account Regulations and Investor Protections in Asia.

Since at least the early 1990s, countries that sought to regulate the capital account risked self-inflicted stigma in the international investment arena, even in the face of uncontroverted analytical reasons for their appropriateness.Subsequent events, including the Asian financial crisis in 1997, have not eliminated the stigma risk from capital account controls but the analytical discussion has shifted to when, not if, such controls are warranted. (more…)

Reprint Series 1 on Financial Liberalization, December 2012

Financial Liberalization: The Key Issues.

In recent years financial policies in both industrial and developing countries have put increased emphasis on the market mechanism. Liberalization was partly a response to developments in the financial markets themselves: as these markets innovated to get round the restrictions placed on them, governments chose to throw in the towel. More important, however, governments embraced liberalization as a doctrine. (more…)

Policy Brief 14, December 2012

National Financial Policy in Developing Countries.

A fundamental question raised by recurrent financial crises in mature and emerging economies is how to ensure that the financial markets and institutions serve growth and development rather than being a constant source of instability and disruption in pursuit of self-interest. (more…)

Policy Brief 13, October 2012

Statutory Sovereign Debt Workout Mechanisms: Why and How?.

Because of the absence of a multilaterally agreed legal system for debt workouts, the practice tends to be ad hoc and disorderly, generally favouring creditors. Often the IMF is involved in coordinating and resolving debt servicing difficulties, be it due to solvency or liquidity problems, based on an adjustment programme agreed with the debtor country. (more…)

Policy Brief 11, October 2012

Financial Instability as a Threat to Sustainable Development.

As seen over and again during recurrent financial crises in both developing and advanced economies (DEs and AEs), including the recent global crisis originating in the US and Europe, financial instability and boom-bust cycles undermine all three ingredients of sustainable development – economic development, social development and environmental protection. (more…)

Research Paper 46, July 2012

Asian Initiatives at Monetary and Financial Integration: A Critical Review.

Whilst the first steps towards Asian trade cooperation stated in 1970s, it was the Asian Financial Crisis of 1997 that triggered Asian efforts at monetary and financial integration. This paper argues that the conditions for Asian monetary integration are not conducive but that efforts at monetary cooperation should proceed at three fronts – exchange rate cooperation, coordination of capital flows control, and strengthening of regional financial liquidity management as in the Chiang Mai Initiative and regional surveillance. (more…)

Policy Brief 10, June 2012

The State of the World Economy – South Centre Statement to the UN High Level Thematic Debate on the State of the World Economy.

The South Centre’s Chief Economist, Dr. Yilmaz Akyüz, took part as a speaker at the UN General Assembly’s two-day Thematic Debate on the State of the World Economy, held in New York on 17-18 May 2012. Below is the statement he presented to one of the four roundtables at the conference. (more…)

Statement, 18 May 2012

Statement to the UN High Level Thematic Debate on the State Of the World Economy, New York

1. Global economic conditions continue to have a strong bearing on production, trade and investment in developing economies (DEs). In this respect the current landscape is not very encouraging. After three years of recovery the world economy still remains highly fragile. (more…)

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