Did developing countries really recover from the Global Crisis? C. P. Chandrasekhar and Jayati Ghosh

We are nearing the tenth anniversary of the collapse of Lehman Brothers in the United States that sparked a Global Financial Crisis,affecting every economy in significant ways. That crisis generated extraordinary monetary policy responses in the advanced economies, with low interest rates and unprecedented expansion of liquidity, in an effort largely driven by central banks to keep their economies afloat. By contrast, expansionary fiscal policy was barely used after the first initial stimulus. In the event, even with these incredibly loose monetary policies, the advanced economies have generally spluttered along, with periodic hopes of recovery dashed by repeated slowdowns –…

East Asian Miracle Myth Making Jomo Kwame Sundaram

Even before the term ‘Washington Consensus’ (WC) was popularized, it was already coming under great criticism despite the ‘counter-revolutions’ against ‘development economics’ and Keynesian economics associated with Thatcherism and Reaganomics. At the World Bank, the Japanese Executive Director argued that the WC menu of policy advice and conditionalities had resulted in the 1980s’ ‘lost decade’ in Latin America and Africa. In contrast, the East Asian region had seen rapid growth and industrialization. At Japanese government expense, the Bank published the East Asian Miracle (EAM) volume in 1993. But instead of recognizing that the WC was in fact the problem, the volume contributed…

The Monopoly of Global Capital Flows: Who needs structural adjustment now? Terry McKinley

The fact that the U.S. economy is monopolizing global net savings from rich and poor countries alike, results in global imbalances which are neither sustainable nor equitable since capital should be recycled to poorer countries, so that they are allowed to pursue more expansionary, growth-oriented economic policies. The rich countries need a major restructuring their expenditures while the U.S. must contain private consumption, especially real estate spending, in favor of productive private investment, and boost exports relative to imports. global_capital_flows (Download the full text in PDF format)