The Trade and Development Report 2009 presents a gloomy global economic outlook in the context of the ongoing global financial and economic crisis. It looks at the channels through which this deep crisis, which originated in developed countries, is spreading to developing and transition economies: through financial flows, international trade and commodity prices, migrants´ remittances and external debt.
The Trade and Development Report 2009 examines in some detail the short-term policy responses taken to tackle the immediate effects of this crisis. These include fiscal stimulus packages, monetary policy easing, and support for ailing financial institutions. Monetary easing and large bailout operations may have prevented a meltdown of the financial system, but they have been insufficient to revive global demand and halt rising unemployment. Countercyclical fiscal policy measures that have a direct effect on aggregate demand should be reinforced, in a coordinated global manner.
In analysing the causes of the crisis, the Trade and Development Report 2009 focuses on the role of excessive risk-taking made possible by financial deregulation and innovation in obscure financial instruments. It highlights the problem of the predominance of financial markets over the fundamentals of the real economy. The experience with this crisis proves that free financial markets do not lead to optimal social and macroeconomic outcomes, and suggests that the relationship between the State and market forces needs to be fundamentally reviewed. The Trade and Development Report 2009 discusses why and how the overall effectiveness of strengthened financial regulation will depend on the way in which measures for financial reform at the national level are combined with a reform of the international monetary and financial system.
More here: http://www.unctad.org/Templates/webflyer.asp?docid=11911&intItemID=3492&lang=1
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