Developing Countries: Growth, Crisis, and Reform

Developing Countries: Growth, Crisis, and Reform

1. The Need for a Historical Perspective

   • Assumed-States once had complete economy freedom
   • Nations-state unrestricted ability to determine economic policy
   • Relationship of state and market

2. Effectiveness of Macroeconomic Policy

   • Monetary policy
   • Macroeconomic policies
   • Fiscal policies and monetary policies.
   • Able to control the troubling vicissitudes of the market.

3. Alleged Consequences of Economic Globalization

   • Domestic and international income disparities
   • Problems of the economic and political integration of the region
   • Unfortunate national policies and government decisions.
     • Air, water, and soil pollution

4. The Limited Nature of Economic Globalization

   • Uneven the integration of the world economy
   • Changes in Trade Flows
     • Multinations cooperations activities
     • Developmnents in international activities
   • “Law of one price”

5. Lessons of developing country crises

   • Choosing the right exchange rate regime
   • The central importance of bank
   • The proper sequence of reform measures.
   • The importance of contagion.

6. The world’s economies

   • low-income economies
   • lower middle-income economies
   • Upper middle-income economies
   • High-income economies

7. Alternative Forms of Financial Inflow

   • Portfolio investment in ownership of firms.
   • Foreign direct investment.
   • Official lending
   • Bank finance.
   • Bond finance

8. Policy trilemma for open economies

   • Stability in the exchange rate
   • Free movement of capital
   • Independence in monetary policy