Stories written by Yilmaz Akyüz

In memoriam ‒ Martin Khor

We are greatly saddened by the passing of Martin Khor, a long-time friend and colleague, an undaunted fighter for the poor and underprivileged, a passionate believer in a more balanced and inclusive multilateralism, a rare intellectual and eloquent orator, an icon of the Global South worthy of veneration, greatly respected for his struggle for justice and fairness against the dominance and double-standards of big economic powers.   

Inequality, Stagnation and Instability ‒ the New Normal for Finance Capitalism

The failure of large-scale bailout operations, historically low interest rates and rapid injection of liquidity to bring about a strong recovery from the 2008-2009 financial crisis and recession created a widespread concern that advanced economies suffered from a chronic demand gap and faced the spectre of stagnation.

Financial Globalization, North-South Wealth Distribution and Resource Transfers

At a time when the world economy is seen poised for yet another financial turmoil, there is a widespread recognition that emerging economies (EMEs) are particularly vulnerable because of their deepened integration into the global financial system.   What is less appreciated is the implication of financial globalization and integration for external wealth distribution between emerging and advanced economies and resource transfers from the former to the latter.

Crisis alla Turca

The meltdown of the Turkish currency over a matter of a few days in August 2018 has elicited various reactions and interpretations both at home and abroad, and created widespread concern that it could mark the beginning of a series of crisis in emerging economies exposed to a reassessment of risks by international investors and lenders as well as a rapid normalization of monetary policy in the United States.

Renewed Crises in Emerging Economies and the IMF ‒ Muddling Through Again?

It is now more than a decade and a half since the last severe currency crisis in a major emerging economy ‒ that was in Argentina in 2001-2002 following a series of crises in Russia, Turkey and Brazil.  It is now common knowledge that such crises generally occur when countries fail to manage surges in capital inflows so as to prevent build-up of fragility including currency appreciations, large and persistent current account deficits, increased leverage and currency and maturity mismatches in balance sheets.  

Asian Financial Crisis: Lessons Learned and Unlearned

Debates are taking place on whether there will be another financial crisis, whether in some part of the world or that is global in scope.  Governments draw lessons from financial crises to adopt measures to prevent their recurrence.  However, such measures are often designed to address the root causes of the last crisis but not the next one.  More importantly, they can actually become the new sources of instability and crisis. 

OPINION: World Economy in Serious Difficulty: Call for Bold Measures

The US was the cause of the crisis but has come out better than anyone else in the advanced world and better than many developing countries. During the crisis there was a widespread perception that this was the end of US hegemony. It was end of the dollar as the major reserve currency.

Foreign Direct Investment: Myths and realities

Foreign direct investment (FDI) is perhaps one of the most ambiguous and the least understood concepts in international economics. Common debate on FDI is confounded by several myths regarding its nature and impact on capital accumulation, technological progress, industrialization and growth in emerging and developing economies.

Opinion: Crisis Resolution and International Debt Workout Mechanisms

Debt restructuring is a component of crisis management and resolution, and needs to be treated in the context of the current economic conjuncture and vulnerabilities.

OPINION: Developing Economies Increasingly Vulnerable in Unstable Global Financial System

After a series of crises with severe economic and social consequences in the 1990s and early 2000s, emerging and developing economies have become even more closely integrated into what is widely recognised as an inherently unstable international financial system. 

North’s Policies Affecting South’s Economies

Since the onset of the crisis, the South Centre has argued that policy responses to the crisis by the European Union and the United States has suffered from serious shortcomings that would delay recovery and entail unnecessary losses of income and jobs, and also endanger future growth and stability. 

Beyond the Millennium Development Goals

The United Nations’ Post-2015 Development Agenda should not simply extend the Millennium Development Goals (MDGs), or reformulate the goals, but focus instead on global systemic reforms and secure an accommodating international environment for sustainable development.

Emerging Economies – From Easy Money to Hard Landing?

Before the world economy has been able to fully recover from the crisis that began more than five years ago, there is a widespread fear that we may be poised for yet another crisis, this time in emerging economies.

The Uncertain Future of the World Economy

Five years into the crisis, growth in the U.S. is still below potential, Europe is struggling to pull out of recession and major emerging economies are slowing rapidly after an initial resilience during 2010-2011.

Are Developing Countries Waving or Drowning?

More than five years since the outbreak of the global financial crisis, the world economy has shown few signs of stabilising and moving towards strong and sustained growth.

YAkyuz

Reconsidering Policies and Strategies in the South

There are numerous reasons to believe that the forces that have been driving growth in developing and emerging economies since 2009 cannot be sustained over the medium term. At the same time, it is impossible to return to the extremely favourable international economic conditions that prevailed before the eruption of the global crisis.

Reconsidering Policies and Strategies in the South

There are numerous reasons to believe that the forces that have been driving growth in developing and emerging economies since 2009 cannot be sustained over the medium term. At the same time, it is impossible to return to the extremely favourable international economic conditions that prevailed before the eruption of the global crisis.

Is the Staggering Rise of the South Sustainable?

Growth in developing economies (DEs) has accelerated significantly in the new millennium.

Global Economy: Prospects Are Bleak Almost Everywhere

Global economic conditions continue to have a strong bearing on production, trade and investment in developing economies. In this respect the current landscape is not very encouraging. After three years of recovery the world economy still remains highly fragile. The short-term outlook predicts contraction in several advanced economies in Europe. Growth in others, including the U.S., is weak and erratic. But more importantly, medium term prospects are bleak almost everywhere.

THE END OF RECOVERY AND THE START OF A NEW GLOBAL DOWNTURN

It is growing increasingly likely that the world will face renewed risks of instability and slowdown before fully recovering from the so-called Great Recession. This is largely because the fragility and imbalances that have built up over recent years as a result of misguided policies in the US and Europe cannot be easily undone, regardless of the policy pursued today.

THE THREATS OF THE BOOM-BUST CYCLE

As in previous episodes, a key factor in the current boom in capital flows to developing and emerging economies (DEEs) is a sharp cut in interest rates and a rapid expansion of liquidity in the major advanced economies (AEs), notably the US. This first occurred in a coordinated way after an agreement at the April 2009 G20 summit in London as a countercyclical response to the crisis. In the US, recovery started in summer 2009 but the strong growth of nearly 4 percent in the first quarter of 2010 slowed to less than 2 percent in the second quarter. The response of the US Federal Reserve was to initiate another round of quantitative easing through purchases of long-term treasuries and other securities. Although the declared objective was to stimulate private spending by lowering long-term interest rates and raising asset values, this move has also been widely seen as an effort to weaken the dollar and stimulate exports.

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