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Lessons from World Bank Research on Financial Crises

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  • Research Group, Development

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    (The World Bank)

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    The benefits of financial development and globalization have come with continuing fragility in financial sectors. Periodic crises have had real but heterogeneous welfare impacts and not just for poor people; indeed, some of the conditions that foster deep and persistent poverty, such as lack of connectivity to markets, have provided a degree of protection for the poor. Past crises have also had longer-term impacts for some of those affected, most notably through the nutrition and schooling of children in poor families. As in other areas of policy, effective responses to a crisis require sound data and must take account of incentives and behavior. An important lesson from past experience is that the short-term responses to a crisis -- macroeconomic stabilization, trade policies, financial sector policies and social -- cannot ignore longer-term implications for both economic development and vulnerability to future crises.

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    Paper provided by The World Bank in its series Policy Research Working Paper Series with number 4779.

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    Length: 33 pages
    Date of creation: 01 Dec 2008
    Handle: RePEc:wbk:wbrwps:4779
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