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Macroeconomic Policy/International Trade KWABENA NYARKO OTOO.

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Presentation on theme: "Macroeconomic Policy/International Trade KWABENA NYARKO OTOO."— Presentation transcript:

1 Macroeconomic Policy/International Trade KWABENA NYARKO OTOO

2 Macroeconomic Policy Objectives In the last 30 years macroeconomic policy has focused too heavily on price stability Having assumed full employment, macroeconomic management in particular, the use of fiscal policy measures has been rendered unnecessary Again other important macroeconomic objectives including employment and growth itself have been neglected or treated as residual outcome of price stability Linked to this is the continued assault on the state and the abiding faith in markets to solve all development challenges;

3 Macroeconomic Policy The state has been weakened to an extent where it can no longer tax or act appropriately in guiding market outcomes For much of the developing still mired in deep development challenges macroeconomic policy needs to be active rather than passive Price stability is important but policies must not constraint growth and employment creation; Fiscal policy must be rescued to fulfill the developmental needs of countries; The state must be rehabilitated; to be able to tax and use revenues in the interest of citizens

4 International Trade International trade as catalyst for development is well acknowledged But the current framework/architecture for trade is difficult to defend; The rules/practices are effectively rigged against the interests of developing countries; The result has been the large trade imbalances that threatens the stability of the world economy; Developed countries have huge trade-distorting subsidies particularly in products of exports interests to developing countries – agriculture products

5 International Trade They keep promising to scrape the subsidies and continue to fail to deliver on those promises At the same time, they continue to deprive developing countries policy measures necessary to shield their fledging industries from the harmful effects of the subsidies; Concluding The Doha Round is necessary but not in its current form; Multilateralism must be upheld; the growing spate of bilateral free trade agreement must be discourages as it undermines commitment to multilateral trade Trade must not be used to deny developing countries the use of policy tools that served so well the development needs of countries in earlier times; Developing countries must be afforded special and differential treatment and policy space recognizing their special development needs


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