Rogers, F. Halsey2012-03-192012-03-192010-06-01https://hdl.handle.net/10986/3838The global financial crisis has not only dealt a major blow to the global economy, but also shaken confidence in economic management in the developed world and the economic models that guide it. The crisis has revealed major market failures, especially in the housing bubble and its transmission to the financial system, but also glaring state failures that propagated and exacerbated the crisis. Will the events of the past two years lead to major shifts in thinking about development economics, and should they? This paper assesses that question for several key domains of development thinking, including the market-state balance, macroeconomic management, globalization, development financing, and public spending. On the one hand, changed global circumstances and new awareness of vulnerability should lead to some policy changes, as developing countries take steps to reduce and buffer risks, including risks generated in developed countries. At the same time, the crisis should largely reinforce the Post-Washington Consensus on development that has emerged over the past decade -- a world view that aims to achieve private sector-driven growth but sees a facilitating role for the state, promotes engaging with the global economy in ways that advance development, and values pragmatism, experimentation, and evidence-based policymaking over ideology.CC BY 3.0 IGOACTIVE MARKETSADMINISTRATIVE CONTROLADVANCED ECONOMIESARBITRAGEASSET PRICEASYMMETRIC INFORMATIONAVERAGE PRODUCTIVITYBAILOUTBAILOUTSBANK POLICYBANKING SYSTEMBANKRUPTCYBONDBOND RATINGBORROWERCAPITAL ACCOUNTCAPITAL ACCOUNT LIBERALIZATIONCAPITAL ACCOUNTSCAPITAL FLOWSCAPITAL MARKETSCENTRAL BANKCENTRAL BANKSCLIMATE CHANGECOMMERCIAL BANKSCOMPARATIVE ADVANTAGECONSUMERSCORPORATE GOVERNANCECOST-BENEFITCREDIT AVAILABILITYCREDIT LINECRISIS COUNTRIESCURRENCYCURRENT PRICESDEBTDEBT CRISISDEBT FINANCINGDEBT LEVELSDEBTSDEFAULT RISKDEVELOPING COUNTRIESDEVELOPMENT ECONOMICSDEVELOPMENT POLICYDEVELOPMENT STRATEGIESDEVELOPMENT STRATEGYDOMESTIC MARKETSECONOMIC ACTIVITYECONOMIC CRISESECONOMIC DEVELOPMENTECONOMIC GROWTHECONOMIC MODELSECONOMIC OUTLOOKECONOMIC POLICIESECONOMIC PROBLEMSECONOMIC RESEARCHECONOMIC THOUGHTEFFICIENT MARKETEMERGING ECONOMIESEMERGING MARKETSEQUITY FINANCINGEXCESS RETURNSEXCHANGE RATEEXOGENOUS SHOCKSEXPORT GROWTHEXPORT VOLUMESEXPORTERSEXPORTSEXTERNAL BORROWINGEXTERNAL DEBTEXTERNAL SHOCKSFEDERAL RESERVEFEDERAL RESERVE BANKFINANCESFINANCIAL CRISESFINANCIAL CRISISFINANCIAL INCENTIVESFINANCIAL INSTITUTIONSFINANCIAL LIBERALIZATIONFINANCIAL MARKETSFINANCIAL POLICIESFINANCIAL POLICYFINANCIAL REGULATIONFINANCIAL RISKFINANCIAL SECTORFINANCIAL SERVICESFINANCIAL SYSTEMFISCAL DEFICITFISCAL DEFICITSFISCAL POLICIESFISCAL POLICYFOREIGN BANKSFOREIGN CAPITALFOREIGN DEBTFOREIGN DIRECT INVESTMENTFOREIGN INVESTORSFULL EMPLOYMENTGDPGLOBAL CAPITALGLOBAL DEVELOPMENT FINANCEGLOBAL ECONOMYGLOBAL MARKETSGLOBAL RECESSIONGLOBAL TRADEGLOBALIZATIONGOVERNMENT ACTIONGOVERNMENT REGULATIONHEALTH SERVICESHEDGE FUNDSHOME OWNERSHIPHOST COUNTRIESHOUSEHOLD SAVINGHOUSINGHOUSING FINANCEHOUSING PRICESHUMAN DEVELOPMENTIMPERFECT INFORMATIONIMPORTSINCOMEINCOME GROWTHINCOME LEVELSINDUSTRIALIZATIONINFLATIONINFLATION RATESINFORMATION ASYMMETRIESINFORMATION TECHNOLOGYINFORMED INVESTORSINSTITUTIONAL ENVIRONMENTINSURANCEINTEREST RATESINTERNATIONAL BANKINTERNATIONAL FINANCEINTERNATIONAL FINANCIAL INSTITUTIONSINTERNATIONAL PORTFOLIOINTERNATIONAL TRADEINVESTINGINVESTMENT BANKSINVESTMENT CLIMATEKEYNESIAN ECONOMICSLEVYLIQUIDITYLOANLOAN MARKETSLOWER PRICEMACROECONOMIC MANAGEMENTMACROECONOMIC POLICYMACROECONOMIC RISKSMACROECONOMIC STABILITYMACROECONOMIC VOLATILITYMACROECONOMICSMARKET DEVELOPMENTMARKET ECONOMYMARKET EFFICIENCYMARKET FAILURESMARKET FOR SECURITIESMARKET MECHANISMMARKET PARTICIPANTSMARKET PLAYERSMARKET PRICESMARKET SIZEMATURE MARKETSMONETARY ECONOMICSMONETARY FUNDMONETARY POLICYMORTGAGEMORTGAGE DEBTSMORTGAGE-BACKED SECURITIESNATIONAL SAVINGNEGATIVE EXTERNALITIESNEOCLASSICAL MODELSNET EXPORTSOLIGARCHYPEER PRESSURESPENSIONPOLICY ADVICEPOLICY RESPONSESPOLITICAL ECONOMYPORTFOLIO CAPITALPORTFOLIO INVESTMENTPORTFOLIOSPRICE SERIESPRODUCT MARKETSPROFITABILITYPROPERTY RIGHTSPRUDENTIAL REGULATIONPUBLIC AGENCIESPUBLIC POLICYPUBLIC SERVICESPUBLIC SPENDINGRATING AGENCIESREAL EXCHANGE RATEREGULATORREGULATORSREGULATORY AGENCIESREGULATORY AGENCYREGULATORY GAPSREGULATORY INFRASTRUCTUREREGULATORY STRUCTUREREGULATORY STRUCTURESRESERVESRESOURCE ALLOCATIONRETIREMENTRETURNRETURNSRISKY ASSETSSAVINGSSAVINGS BEHAVIORSHORT-TERM CAPITALSHORT-TERM LIQUIDITYSOLVENCYSTATE FAILURESSTATE INTERVENTIONSUPPLY SHOCKSSWAPSSYSTEMIC RISKTAXTRADINGUNCERTAINTIESUNDERLYING PROBLEMSUNEMPLOYMENTVALUATIONVALUATIONSVALUE AT RISK MODELSWEALTHWEALTH EFFECTSWORLD ECONOMYWorld Bank10.1596/1813-9450-5353