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Views from the Center

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Middle Income and Emerging Markets May Be Most at Risk (Development Impacts of Financial Crisis)

As with all financial disasters -- whether it's your neighbor’s lost job or a macroeconomic shock -- the first thing people want to know is "will it hit me?" This question must be on the minds of ordinary people and macroeconomic policymakers across the world, including those in developing countries. The policymaker's answer will depend on two things: (1) how closely is her country integrated in the international financial markets; and (2) how vigilant have her country's regulators been in regulating and supervising its capital markets?

Thoughts on the Financial Crisis and the Other Kind of Contagion (Development Impacts of Financial Crisis)

Relatively short-lived ups and downs like this are far less important than the long term trends: the growth of emerging economies, the impact of global warming, the changing age structure and disease patterns across the world. Like a hurricane, a financial crisis reminds us of how vulnerable we are, and how the most vulnerable are the least well protected. But just as a single hurricane doesn't tell us much about the climate, this episode of financial crisis doesn't tell us much about the longer term forces that, in the end, shape our collective destiny.

Poor in Developing Countries are Victims of Our Mistakes (Development Impacts of Financial Crisis)

I suspect that the fallout from this crisis will remind us all that rich world growth and macro policy still matter for developing countries and for the poor within them, even though some of these economies are very large and have been growing very rapidly. The growing interconnectedness of the world -- globalization -- means that they are victims of our mistakes just as we are increasingly vulnerable to theirs.

U.S. Financial Crisis Will Mean Slower Growth, Rising Inequality in Developing World (Development Impacts of Financial Crisis)

For many developing countries, the U.S. credit crisis will mean slower growth and rising inequality. The effects will be protracted, and not all will show up at the same time. And the nature and degree of impact will vary widely. Some countries, notably those with extensive foreign exchange reserves and strong fiscal positions, will be much better able to cope than others. But overall the crisis is very bad news for developing countries and especially for the poor.

What Happened to Japan's Rice Pledge?

Earlier this year, with the food crisis in the daily headlines, the world's leaders made promises -- first in Rome at an FAO gathering in June and then at the G-8 summit in Japan the following month -- to make a concerted effort to provide relief for the world's poor.

Accra Agenda for Action: A Few (Small) Steps in the Right Direction

This is a joint posting with Ayah Mahgoub

The Third High Level Forum on Aid Effectiveness held in Accra, Ghana has come to an end, with as many as 1,500 people (officials, advocates, activists) milling and talking. The conference was convened as a follow-up to the 2005 Paris Declaration on Aid Effectiveness, in which donors and recipients agreed on five major principles to improve foreign aid: recipient country ownership of programs and reforms funded by aid, alignment of donor programs to recipient country priorities, harmonization and coordination between donors, managing for results, and mutual accountability of both donors and recipients for achieving those results.

Battling Our Brains: Psychology, Happiness, and Global Warming

Why are some societies rich and others poor? On this subject, Nobel Laureate Robert Lucas wrote, "The consequences for human welfare involved in questions like these are simply staggering: once one starts to think about them, it is hard to think about anything else." The topic is a fascinating one, no doubt, and legions of social scientists have devoted careers to it. But it is quite secondary to a far more fundamental question: Why are some people happy and others not?

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