Stability with Growth: Macroeconomics, Liberalization and Development

Stability with Growth: Macroeconomics, Liberalization and Development

Stability with Growth: Macroeconomics, Liberalization and Development

Stability with Growth: Macroeconomics, Liberalization and Development

Synopsis

There is growing dissatisfaction with the economic policies advocated by the IMF and other international financial institutions - policies that have often resulted in stagnating growth, crises, and recessions for client countries. This book presents an alternative to "Washington Consensus"neo-liberal economic policies by showing that both macro-economic and liberalization policy must be sensitive to the particular circumstances of developing countries. One-size-fits-all policy prescriptions are likely to fail given the vast differences between countries. This book discusses howalternative approaches to economic policy can better serve developing countries both in ordinary times and in times of crisis.Written by the leading names in the field, this book introduces the issues and the objectives of macroeconomic policy from various perspectives. It also presents an analysis of macroeconomic models and policy perspectives on stabilization and capital markets liberalization from conservative,Keynesian, and heterodox perspectives.

Excerpt

Alternative Perspectives on Macroeconomics and Capital Market Liberalization for Developing Countries

By mid-2000, the debate on globalization had already begun. Protests in Seattle had brought the most recent round of World Trade Organization (WTO) trade negotiations to a temporary halt. the negotiators wouldn’t resume their work until November 2001, until after the advanced industrial countries had made a commitment that the next round, called the ‘Development Round’, would rectify some of the inequities of the past.

Just a few months earlier, protestors had also demonstrated against the spring meetings of the International Monetary Fund (IMF) and World Bank to call attention to what they viewed as serious problems at both institutions, including the limited participation in economic decision-making for developing countries and the narrow range of perspectives and policies that were often recommended. For over two decades, these Washingtonbased institutions had imposed a set of policies that had come to be called ‘the Washington consensus’. Although many of the policies had more subtlety and texture than are sometimes acknowledged, the Washington consensus reflected conventional wisdom that emphasized low inflation, fiscal stringency, privatization, and liberalization. This so-called consensus, however, mainly included policy-makers located between 15th Street and 19th Street in Washington, site of the us Treasury and imf headquarters, respectively. the consensus did not include many other people in Washington, academia, or the developing world.

In response to the debate, a group of economists and other social scientists met in Washington, dc in mid-2000 to launch a new initiative. Participants at the meeting agreed there was a pressing need to broaden the policy dialogue in developing countries, and the Initiative for Policy Dialogue (IPD) was born. Initially headquartered at the Carnegie Endowment for International Peace and at Stanford University, after one year ipd moved to Columbia University where it is now housed. the Initiative receives core . . .

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