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The Financial Crisis and Its Impact on Developing Countries

Author

Listed:
  • Stephany Griffith-Jones

    () (Columbia University)

  • José Antonio Ocampo

    () (Columbia University)

Abstract

This working paper has been commissioned by the Poverty Group, Bureau for Development Policy at UNDP, to identify the transmission mechanisms of the financial crisis from developed to developing countries and to provide broad policy recommendations at the national, global and regional level. The paper identifies three mechanisms that play a key role in spreading the consequences of the financial crisis to the developing world: remittances, capital flows and trade. The policy responses take MDG achievement and poverty reduction as the central policy concern. The paper indicates that a fair number of countries have policy space to protect vulnerable groups in the short run as well as to undertake investments to build resilience and reach these goals in the longer term. Other countries will need additional development assistance to protect development achievements. The authors point to a number of factors that need to be taken into account in determining what mix of policies to deploy including the macroeconomic, fiscal and policy stance of countries and their dynamics. The paper also proposes far-reaching reforms to address the global financial crisis, which would help to put the global macroeconomic, fiscal and financial coordination mechanisms on a firmer footing.

Suggested Citation

  • Stephany Griffith-Jones & José Antonio Ocampo, 2009. "The Financial Crisis and Its Impact on Developing Countries," Working Papers 53, International Policy Centre for Inclusive Growth.
  • Handle: RePEc:ipc:wpaper:53
    as

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    File URL: http://www.ipc-undp.org/pub/IPCWorkingPaper53.pdf
    File Function: First version, 2009
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    References listed on IDEAS

    as
    1. Abhijit V. Banerjee & Esther Duflo, 2008. "What Is Middle Class about the Middle Classes around the World?," Journal of Economic Perspectives, American Economic Association, vol. 22(2), pages 3-28, Spring.
    2. Francisco H.G. Ferreira & Julian Messina & Jamele Rigolini & Luis-Felipe López-Calva & Maria Ana Lugo & Renos Vakis, 2013. "Economic Mobility and the Rise of the Latin American Middle Class
      [La movilidad económica y el crecimiento de la clase media en América Latina]
      ," World Bank Publications, The World Bank, number 11858.
    Full references (including those not matched with items on IDEAS)

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    Cited by:

    1. Sami Bibi & John Cockburn & Ismaël Fofana & Luca Tiberti & Paul Ningaye & Christian Arnault Emini, 2010. "Impacts of the Global Economic Crisis on Child Poverty in Cameroon and Options for a Policy Response," Papers inwopa598, Innocenti Working Papers.
    2. Tambunan, Tulus T.H., 1. "Crisis-Adjustment Strategies Adopted by SMEs in Coping with the 2008-2009 Global Economic Crisis: The Case of Indonesia," Asian Journal of Agriculture and Development, Southeast Asian Regional Center for Graduate Study and Research in Agriculture (SEARCA), vol. 8(1).
    3. Barry Eichengreen, 2010. "Lessons of the crisis for emerging markets," International Economics and Economic Policy, Springer, vol. 7(1), pages 49-62, May.
    4. Sami Bibi & John Cockburn & Christian Arnault Emini & Luca Tiberti & Ismaël Fofana & Paul Ningaye, 2010. "Incidences de la crise economique mondiale de 2008/09 et des options de la politique de reponse sur la pauvreté des enfants au Cameroun," Papers inwopa600, Innocenti Working Papers.
    5. Luca Tiberti & Ismaël Fofana & John Cockburn & Lacina Balma & Samuel Kaboré, 2010. "Simulation des effets de la crise économique et des politiques de reponse sur les enfants en Afrique de l'Ouest et du Centre: le cas du Burkina Faso," Papers inwopa599, Innocenti Working Papers.
    6. Gkanoutas-Leventis, Angelos & Nesvetailova, Anastasia, 2015. "Financialisation, oil and the Great Recession," Energy Policy, Elsevier, vol. 86(C), pages 891-902.
    7. Ahmed Khalid, 2012. "Cost Consequences to the Economy and Finance," Chapters,in: Regulatory Failure and the Global Financial Crisis, chapter 7 Edward Elgar Publishing.
    8. Bernhardt, Thomas, 2016. "South-South trade and South-North trade: which contributes more to development in Asia and South America? Insights from estimating income elasticities of import demand," Revista CEPAL, Naciones Unidas Comisión Económica para América Latina y el Caribe (CEPAL), April.
    9. Lacina Balma & John Cockburn & Ismaël Fofana & Samuel Kaboré & Luca Tiberti & UNICEF Innocenti Research Centre. MONEE project & UNICEF Regional Office for West and Central Africa, 2010. "Simulation of the Effects of the Economic Crisis and Response Policies on Children in West and Central Africa: The Case of Burkina Faso," Papers inwopa615, Innocenti Working Papers.
    10. Aldean, Cory, 2010. "Financial crisis response plan," MPRA Paper 28166, University Library of Munich, Germany, revised 27 Jan 2011.
    11. Izabela Sobiech, 2015. "Remittances, finance and growth: does financial development foster remittances and their impact on economic growth," FIW Working Paper series 158, FIW.

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    Keywords

    The Financial Crisis and Its Impact on Developing Countries;

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