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Cost of the Financial Crisis to Developing Economies



The financial crisis has had a devastating effect on developing economies. This project aims to estimate the scale of that effect across arrange of variables, include output growth, exports, aid, remittances and capital flows.

The financial collapse of 2008 and 2009 produced the worst global recession since the 1930s. Demand in developed economies slumped, despite efforts by governments and central banks to support it through easier fiscal and monetary policies. Inevitably, this had negative consequences for developing economies. Furthermore, the effects of the collapse will probably linger for several years, so the full extent of the effect on developing economies has yet to be seen.

This comprehensive analysis will look at the scale of the impact on export revenues and output growth, on foreign direct investment into developing economies, on aid flows, on remittances back to developing economies and on capital flight. It will include a comparison, across a range of factors, of outturns for 2008 and 2009 and the most recent projections for 2010 and later years with projections made in 2007 – or reasonable estimates of underlying trends at the time - to estimate the effect of the financial collapse on developing economies.

For further information please contact Tony Dolphin, senior economist: / +44 (0)20 7470 6184.