As the world economy has become more interconnected
through trade, investment, technology and people flows, it
has also become more interdependent. This is the subject
of Section E. Just as the economic benefits of widening
and deeper integration now spread more quickly across
countries and regions, so too do the economic costs, as
exemplified by the way in which the shockwaves from the
2008 financial crisis and the subsequent economic downturn
reverberated globally. Policy decisions in one country can
have simultaneous and often unintended spill-over effects
in many distant countries. These spill-overs can become
major setbacks for developing economies, especially for the
smallest and poorest countries, which lack adequate shock
absorbers and are the most vulnerable to economic volatility.