Rich countries have earmarked about $7 trillion to reverse the current global economic slump. The United States allotted $700 million to rescue ailing banks. About $180 billion was used to rescue just one insurer (AIG). A $787 billion stimulus package is also in place. The United Kingdom set aside $692 billion. The Chinese announced a $586 billion fiscal stimulus. Monetary policy has also become expansionary. The US and the UK cut interest rates to zero per cent and 0.5 per cent, respectively. Can low-income countries embark on such expansionary fiscal and monetary policies? Unfortunately not, as the case of Ethiopia demonstrates
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Paper provided by International Policy Centre for Inclusive Growth in its series One Pager with number
78.
Length: 1 Date of creation: Mar 2009 Date of revision: Publication status: Published by UNDP - International Policy Centre for Inclusive Growth , March 2009, pages 1-1 Handle: RePEc:ipc:opager:78