CESifo DICE Report 3 35 / 2013 (September) - Policy Brief #10
There is growing recognition of the need for more stable capital flows to help moderate the boom-bust patterns of capital flows that are so disruptive for the real economy and can cause such costly financial crises. Indeed, the major European debt crisis has, to a great extent, been preceded by very large capital flows, showing that this is not just a major concern for developing and emerging economies, but also for their developed counterparts. It is, in fact, surprising how little emphasis has been placed on the role that capital flows, mainly within Europe, have played in causing the Eurozone debt crisis. More generally, a major challenge for both developed and developing countries is to ensure that both national and international financial systems are more stable. It is therefore very important to develop instruments that can in concrete terms diminish this boom-bust pattern. Growth-linked bonds are an excellent example of such a market-based instrument.
About the Authors
Financial Markets Program Director
Initiative for Policy Dialogue (IPD)
Stephany Griffith-Jones is an economist specialising in international finance and development, with emphasis on reform of the international and national financial system, especially in relation to financial regulation and global governance. She is Financial Markets Director at the Initiative for Policy Dialogue, Columbia University. Previously she was Professorial Fellow at the Institute of Development Studies at Sussex University. She was Director of International Finance at the Commonwealth Secretariat and worked at UN DESA and ECLAC. She was senior consultant to governments in Eastern Europe, Latin America and Africa and many international agencies, including the World Bank, the IADB, the European Commission, UNDP and UNCTAD. She was a member of the Warwick Commission on financial regulation. She currently is theme leader on finance in the ESRC /DFID growth programme for LICs, especially African ones. She has published over 20 books and many scholarly and journalistic articles. Her books include Time for the Visible Hand, Lessons from the 2008 crisis, edited jointly with José Antonio Ocampo and Joseph Stiglitz.
Department of Economic and Social Affairs