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Views from the Center

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Emerging Markets Slowdown: Global and Domestic Economic Policy Challenges

Toward the end of the 2008 global economic crisis, the consensus was that developed economies would recover just as quickly as they did in past recessions. It was also expected that emerging market economies would continue acting as the world growth locomotive for a relatively long time. Until mid-2011, this perspective appeared to be in the process of materializing. By now, however, this scenario differs significantly from reality.

Strengthening Capital Markets in Emerging Economies: Two Key Issues that the G20 Should Not Miss

The agenda for the G-20 finance ministers and central bank governors meeting in Sydney this weekend focuses on two themes: promoting stronger economic growth and employment and making the global economy more resilient. The G-20 leaders have recognized that expanding and strengthening capital markets in developing countries is crucial to both these goals and member countries have identified this as a priority issue for their deliberations.

Is Latin America Ready for the Return of Normal?

New uncertainties come to the fore now that the global economy, after six years of turmoil, is showing signs of a return to a more normal situation, where real interest rates in the United States turn positive and commodity prices stabilize at a somewhat lower level, due to a cooling of red-hot demand from China. How will Latin America, which has been buoyed by capital inflows seeking higher returns, respond to the return of normal?  Will the economic and social progress observed during the past two decades hold?

Counter-Cyclical Macroprudential Regulations: What India and Others Could Learn from a Few Latin American Countries

It’s been a tough few months for emerging-market currencies. The top slider, India’s rupee, has fallen 20 percent against the US dollar. The Indonesian rupiah and the Brazilian real have fallen about 15 percent; Turkey’s lira is down about 10. As the currencies fall, so do the countries’ international reserves, creating what’s known in non-technical terms as a really bad situation.

Taxing Kenya’s M-Pesa Picks the Pockets of the Poor

Kenya has instituted a new tax that affects users of M-Pesa -- a widely popular phone-based money transfer service used by more than half of Kenya’s adult population. The new 10 percent excise duty on fees charged for money transfer services applies to mobile phone providers, banks, and other money transfer agencies. Operated by Safaricom, the largest mobile network operator in Kenya, M-Pesa accounts for the largest share of users of money transfer services. Users of M-Pesa products will therefore bear most of the impact of the tax.

Finance Lessons from Emerging Markets for Europe and the United States

Last week I was one of a handful of speakers at the annual meeting of the Bretton Woods Committee, a non-partisan group that works to promote international economic cooperation and to foster strong, effective Bretton Woods institutions (i.e. the IMF and World Bank). Other speakers at the meeting, which was titled “From Vicious to Virtuous: The Cycle of Debt, Stability, and Growth” included U.S. Rep.

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