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Alternative Development Strategies for the Post-2015 Era

image of Alternative Development Strategies for the Post-2015 Era
The global economic crisis of 2008-2009 exposed systemic failings at the core of economic policymaking worldwide. The crisis came on top of several other crises, including skyrocketing and highly volatile world food and energy prices and climate change. This book argues that new policy approaches are needed to address such devastating global development challenges and to avoid the potentially catastrophic consequences to livelihoods worldwide that are likely to result from present approaches. The contributors to the book are independent development experts brought together to identify a development strategy capable of promoting a broad-based economic recovery and at the same time guaranteeing social equity and environmental sustainability both within countries and internationally. This new development approach seeks to promote the reforms needed to improve global governance, providing a more equitable distribution of global public goods.

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Building a stable and equitable global monetary system

The recent global financial crisis brought back the reform of the international monetary system into the center of global policy debates. Major concerns have been the problems generated by the fact that a national currency remains at the center of the global monetary system, the recessionary (or deflationary, as they are usually called) effects of the asymmetric adjustments of deficit vs. surplus countries during crises, and the possible recessionary effects of the accumulation of large amounts of reserves as a precautionary measure by developing and emerging economies (“self-insurance”, as it has come to be called). One of the large holders of dollar reserves called for the gradual replacement of the dollar with the Special Drawing Rights (SDRs) at the center of the system (Zhou, 2009), bringing the world back to similar calls made during the early 1970s (Williamson, 1977). However, the collapse, at that time, of the Bretton Woods arrangement led to what effectively can be characterized as a global monetary “non-system”.

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