Inflation targeting (IT) was the dominant
monetary policy paradigm for the last two
decades. There are now 17 emerging and
developing economies that practice IT with a
median-targeted inflation rate of 3 per cent.1
A
recent review (Roger, 2010)2
observes, “A
growing number of countries are making a
specific inflation rate the primary goal of
monetary policy, with success”.

The central challenge for a government of
a post-conflict country is achieving a social
consensus for peace. While macroeconomic
policies are not the primary mechanism to
achieve social peace, their fundamental goal
should be to contribute to that end, not to
make it more difficult.

After several decades of a narrow focus on
controlling inflation and reducing fiscal
deficits, discussions of macroeconomic policy
have returned to fostering growth and
development. The IMF’s Chief Economist,
Olivier BlanchardD
1
D has stated that “in the ageold
discussion of the relative roles of markets
and the state, the pendulum has swung—at
least somewhat—toward the state”. He added:
“macroeconomic policy has many targets and
many instruments” and “monetary policy has
to go beyond inflation stability”.D
2
D Justin Yifu
Lin, Senior Vice President and Chief
Economist at the World Bank, has also argued
for a “New Structural Economics”,
emphasizing industrial development as the
way out of poverty.D
3
D

The U.S. Trade Representative’s “2010 Trade Policy
Agenda” states that “improved packages in services
(providing new market access in key infrastructure
services sectors such as financial services …)” is key to
moving Doha forward.1

Private financial institutions significantly influence
healthcare and pensions in developing countries.
‘Financialization’ - the expanding systemic power and
scope of finance and financial markets and actors - has
persisted, even through the financial crisis, without
adequate debate or scrutiny. With global health spending
at $5.3 trillion and global pensions assets at $29.5 trillion,
national health and pension funds represent significant
opportunities for financial corporations.

Barely two years since the Great Recession first hit
the world economy, global attention has shifted
from the crisis and its origins to the ostensible
burden imposed by the stimulus measures adopted by
governments in response. Not all governments opted for
a significant, let alone adequate, fiscal stimulus in
response to the crisis; and not all the accumulated fiscal
deficits are attributable to voluntary measures.

Fiscal consolidation seems to be the cry of the day, at
least in Europe and Japan. Fiscal consolidation in the US
during the Clinton years, Denmark (1983-87) and
Ireland (1987-89) and the relative prosperity that ensued,
have led many to believe that it is possible to achieve
fiscal consolidation without harming growth and
employment prospects. Thus, the tide has turned against
the very brief period when “we were all Keynesians”
that helped prevent the world economy sliding into deep
depression.

In most parts of the world today, most policy
makers talk about imposing regulations on the
financial sector.

Everyone is talking about China’s currency, it seems.
Amidst months of building tension, there is an apparent
consensus among most economists, the financial press, and
leading economic policy makers in the West that the
renminbi is hugely undervalued, making China’s exports
unfairly competitive. The global imbalances created by
such ‘mercantilist’ and ‘protectionist’ exchange rate
strategies, it is argued, have been a central cause of global
financial instability. China must therefore revalue, for the
good of both itself and the world.1