{"id":351,"date":"2008-11-08T21:45:22","date_gmt":"2008-11-09T04:45:22","guid":{"rendered":"http:\/\/www.rickyopaterny.com\/blog\/2008\/11\/08\/jeffrey-sachs-on-the-financial-crisis\/"},"modified":"2008-11-08T21:45:25","modified_gmt":"2008-11-09T04:45:25","slug":"jeffrey-sachs-on-the-financial-crisis","status":"publish","type":"post","link":"https:\/\/gen-o.com\/blog\/2008\/11\/08\/jeffrey-sachs-on-the-financial-crisis\/","title":{"rendered":"Jeffrey Sachs on the financial crisis"},"content":{"rendered":"

In a recent post on the Financial Times<\/a> site, Columbia University Jeffrey Sachs economist proposes some steps that the international community can take to limit the damage:\u00a0<\/p>\n

First, the US Federal Reserve, the European Central Bank and the Bank of Japan should extend swap lines to all main emerging markets, including Brazil, Hungary, Poland and Turkey, to prevent a drain of reserves.<\/p>\n

Second, the International Monetary Fund should extend low-conditionality loans to all countries that request it, starting with Pakistan.<\/p>\n

Third, the US and European central banks and bank regulators should work with their big banks to discourage them from abruptly withdrawing credit lines from overseas operations. Spain has a role to play with its banks in Latin America.<\/p>\n

Fourth, China, Japan and South Korea should undertake a co-ordinated macroeconomic expansion. In China, this would mean raising spending on public housing and infrastructure. In Japan, this would mean a boost in infrastructure but also in loans to developing nations in Asia and Africa to finance projects built by Japanese and local companies. Development financing can be a powerful macroeonomic stabiliser. China, Japan and South Korea should work with other regional central banks to bolster expansionary policies backed by government-to-government loans.<\/p>\n

Fifth, the Middle East, flush with cash, should fund investment projects in emerging markets and low-income countries. Moreover, it should keep up domestic spending despite a fall in oil prices. Indeed, the faster a global macroeconomic expansion is in place the sooner oil prices will recover.<\/p>\n

Sixth, the US and Europe should expand export credits for low and middle-income developing countries, not only to meet their unfulfilled aid promises but also as a counter-cyclical stimulus. It would be a tragedy for big infrastructure companies to suffer when the developing world is crying out for infrastructure investment.<\/p>\n

Finally, there is scope for expansionary fiscal policy in the US and Europe, despite large budget deficits. The US expansion should focus on infrastructure and transfers to cash-strapped state governments, not tax cuts. This package will not stop a recession in the US and parts of Europe, but could stop a recession in Asia and the developing countries. At the least it would put a floor on the global contraction that is rapidly gaining strength.<\/p><\/blockquote>\n","protected":false},"excerpt":{"rendered":"

In a recent post on the Financial Times site, Columbia University Jeffrey Sachs economist proposes some steps that the international community can take to limit the damage:\u00a0 First, the US Federal Reserve, the European Central Bank and the Bank of Japan should extend swap lines to all main emerging markets, including Brazil, Hungary, Poland and […]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[2,1],"tags":[],"aioseo_notices":[],"_links":{"self":[{"href":"https:\/\/gen-o.com\/blog\/wp-json\/wp\/v2\/posts\/351"}],"collection":[{"href":"https:\/\/gen-o.com\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/gen-o.com\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/gen-o.com\/blog\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/gen-o.com\/blog\/wp-json\/wp\/v2\/comments?post=351"}],"version-history":[{"count":1,"href":"https:\/\/gen-o.com\/blog\/wp-json\/wp\/v2\/posts\/351\/revisions"}],"predecessor-version":[{"id":352,"href":"https:\/\/gen-o.com\/blog\/wp-json\/wp\/v2\/posts\/351\/revisions\/352"}],"wp:attachment":[{"href":"https:\/\/gen-o.com\/blog\/wp-json\/wp\/v2\/media?parent=351"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/gen-o.com\/blog\/wp-json\/wp\/v2\/categories?post=351"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/gen-o.com\/blog\/wp-json\/wp\/v2\/tags?post=351"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}