Chapter

Mutual Reinforcement

Anne O. Krueger

in Financial Markets Volatility and Performance in Emerging Markets

Published by University of Chicago Press

Published in print March 2008 | ISBN: 9780226184951
Published online February 2013 | e-ISBN: 9780226185040 | DOI: http://dx.doi.org/10.7208/chicago/9780226185040.003.0009
Mutual Reinforcement

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This chapter examines some of the lessons learned during the financial crises of the 1990s. It focuses on the close relationship between financial markets and the macroeconomic environment that provides the framework for rapid and sustained economic growth—and the rise in living standards and reduction in poverty that growth makes possible. The chapter also discusses the way the International Monetary Fund is ready to help its member countries to undertake and implement reforms, especially those in the financial sector. The breadth and depth of financial markets becomes ever more important as growth accelerates. High growth rates are only attainable and sustainable if they are supported by a strong and efficient financial sector. The economies that have sustained rapid growth over the long term are those whose financial sectors have become increasingly sophisticated, complex, and adaptable as the economy grows.

Keywords: financial crises; financial markets; macroeconomic environment; International Monetary Fund; economic growth; financial sector; living standards; poverty

Chapter.  5429 words. 

Subjects: Macroeconomics and Monetary Economics

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