Emerging Market Countries and the Crisis: How Have They Coped?


By Reza Moghadam

How time flies: only a year ago, we were in the throes of the biggest global crisis since the Great Depression. As the extent of the damage to institutions in financial centers became evident—starkly highlighted by the Lehman bankruptcy—and the crisis started to affect emerging market economies (EMs), a timely and coordinated countercyclical response was launched.

This helped stave off the worst of the crisis. The IMF supported the global response by increasing its resources and overhauling its lending framework to help those facing financing pressures. A recovery is now taking hold in many parts of the world.

Six months ago, we took a preliminary look at the design and performance of IMF-supported programs in emerging markets. In a forthcoming paper, we are casting a wider net—examining factors that determined the extent to which a broader group of EMs were affected by the crisis, the policy measures they have taken, factors shaping the ongoing recovery, and sustainability considerations over the medium term.

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High-Stakes Choices In Next Stage of Crisis


By Caroline Atkinson

After averting a second Great Depression, what should policy makers do to foster recovery?

Economic policymakers are rarely popular. Central bank governors are notorious for removing the punch bowl at the party. Ministers of finance are traditionally the ones who say no to their colleagues’ pet spending projects.

In the upside-down world of recent months, finance ministers and central bank governors around the world seemed to have switched sides.  They became cheerleaders for expansionary policies. The IMF has argued strongly for this, as long as countries had room to take on more debt. Despite some hiccups, it seems clearer with every economic release that the extraordinary actions governments have taken have paid off, at least in halting the slide. Economic prospects may not be quite as bright as recent market moves would suggest. But the risk of spreading financial collapse has lessened markedly

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