Reshaping the Global Economy

Jean Pisani-Ferry and Indhira Santos
The crisis and the national responses to it have started to reshape the global economy and shift the balance between the political and economic forces at play in the process of globalization. The drivers of the recent globalization wave are being undermined, and the spirit of protectionism has reemerged.

Deep Impact

David Hofman, Roberto Guimaraes, Alessandro Zanello, Isabell Adenauer, Norbert Funke, Charles Amo Yartey, and Siobhán McPhee
As world trade slumps, steel producer Ukraine and consumer electronics manufacturer Singapore face shriveling demand and drooping prices for their output. At the same time, cotton exporter Burkina Faso's production reforms encounter fading textile buyers, and hi-tech nursery Ireland fails to keep its migrant labor employed.

Trade Finance Stumbles

Thomas Dorsey
The cost of trade finance has risen rapidly, while in some cases its availability has fallen, especially in emerging markets. According to a recent survey, banks anticipate these trends to continue in 2009.

Changing Fortunes

Gian Maria Milesi-Ferretti
The ongoing financial crisis has caused dramatic changes in asset prices and exchange rates across the globe. These changes have significantly affected the external assets and liabilities of the main creditor and debtor countries.

What Is to Be Done

Laura Kodres and Aditya Narain
One key contributor to the global financial crisis was inadequate regulation. Regulatory structures must therefore be revamped to prevent another buildup of systemic risks and the provision of liquidity must also be improved. The IMF has been examining several areas that will require attention to prevent systemic crises.

Paying the Piper

Carlo Cottarelli
The impact of the crisis on public finances is substantial. This article offers a possible strategy whereby fiscal policy can foster the resumption of normal economic growth while maintaining public sector solvency.

More on the Global Crisis

See more coverage of the financial crisis, including:

• the December 2008 issue of F&D, which looks at the impact of the economic crisis,
• the June 2008 issue of F&D, which examines the origins of the crisis, and
• a podcast with the IMF's Charles Collyns and Laura Kodres on the global economic crisis and the prospects for recovery.

Data to the Rescue

Adelheid Burgi-Schmelz
This article examines what has been achieved in recent years to strengthen the international collection and distribution of statistical information, and makes suggestions for what should be done to further improve international cooperation and plug gaps highlighted by the crisis.

A New Bretton Woods?

James M. Boughton
History shows that reforming the international financial systems requires three ingredients: effective leadership combined with inclusive participation; clearly stated and broadly shared goals; and a realistic roadmap for reaching those goals.

Viewpoints

Redrawing the Boundaries

Roger Bootle
We need to fix the financial markets, and that means, in a variety of ways, a bigger role for government. But this should not lead to bigger government.

The Shape of Things to Come

Brad Setser
This crisis is still in its early stages. Past experience suggests that national decisions will do more to define the shape of the world's financial system than international summits.

A Tangled Web

Amar Bhattacharya
Everyone agrees on reforming the governance of financial markets, but there is no agreement on how much reform is needed, who will do what, and how international cooperation will be coordinated and enforced.