• Summary
  • Contents
  • Subject index

The global financial crisis has proved that economic realities are very different from the traditional assumptions of macroeconomics. Macroeconomic Policies for Emerging and Developing Economies provides a contemporary analytical account and discusses the current debates on the theory and practices of macroeconomic policies of developing economies emerging from the crisis. It deals with issues relating to openness, capital flows and exchange rate policies as well as macro-financial policies. It underscores two important points: the need to design a development strategy that takes into account the economic context of the countries concerned, and for well-regulated macro-financial policies that would help promote the objects of sustainable growth with price and financial stability. This engaging and unrivalled guide to macroeconomic policy goes beyond the standard macroeconomists’ tool kit of monetary, fiscal and exchange rate policies and includes topics such as development strategies and macro-financial policies.

The Desserts
The desserts

MEP, as the previous chapters have shown, is not an exact science. It is essentially the art of the possible. It encompasses fiscal, monetary and exchange rate policies in the main and draws its sustenance from the country's development strategy. For a long time, students have been brought up to believe that MEP deals with self-interested and highly selfish people. It is also believed that markets know what the population wants: they dominate and dictate the course, content and speed of development. Adam Smith's ‘invisible hand’ which is described loosely as selfish interest, however, has lost its sheen: it is not, and indeed cannot be the current paradigm of MEP. The current world believes that people have motives that go beyond ...

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