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incentives diverge. Credit allocation policies extendthe toolkit available to pursue a range of objectivesand should be considered as part of an alternativeapproach to macroeconomic management.Due to the increased mobility of capital and financeacross borders, however, governments may haverestricted scope when it comes to implementingalternative monetary policies. Many countriescannot implement independent exchange rateand interest rate policies, limiting their ability topursue monetary alternatives. This raises importantissues of policy space, state sovereignty and globaleconomic governance, which are explored ingreater depth later in this chapter.RecommendationsIn order to help realize economic and social rightsand contribute to substantive equality for women,monetary policy should:• Incorporate additional targets beyond anarrow focus on reducing inflation, such as realproductive activity, employment or incomeswith links to the realization of rights over time• Consider distributive consequences, via monetarypolicy committees, including the impact ofinflation and interest rates on gender equality• Adopt central bank policies and regulationsthat encourage commercial lending to supportthe realization of economic and social rights,through investments in housing and sectors withhigh potential for job-creation or loans to smallenterprises and self-employed workers• Consider introducing requirements andincentives that encourage commercialbanks to extend additional credit to areas ofsocial concern such as housing, job-creatinginvestments or credit to agricultural and smallscalebusinesses; development banks could alsodirect resources to these priority areas• Increase accountability, participation andtransparency in the formulation of central bankpolicy, including through strengthening thevoices of women’s rights organizations.GUARDING AGAINST RETROGRESSION OFECONOMIC AND SOCIAL RIGHTSFinancial globalization has brought with it athreat of destabilizing financial flows and periodiceconomic crises that can result in a rollback in therealization of rights. As part of their obligations inthe international human rights system, States shouldtake steps to guard against retrogression in theenjoyment of rights, such as a reduction in labourrights, an increase in demands on women’s unpaidlabour or increases in violence against women.Macroeconomic policy should therefore aim toreduce vulnerabilities by minimizing systemic risks.A range of experiences discussed in this Reporthighlight the gender-differentiated outcomes of theresponse to a negative economic shock that affectwomen’s labour force participation, demands ontheir unpaid labour and the distribution of incomeand power within the household. Macroeconomicpolicy can address instability by ensuring thatadequate resources are available to finance socialprotection for vulnerable groups and populationsto cope with adverse shock (as described inChapter 3). Social protection policies also havemacroeconomic implications. For example,countries with externally oriented economies arehighly susceptible to shocks in the global economy.Social protection policies operate as automaticstabilizers in the face of such volatility, therebycontributing to the country’s economic development(see Box 4.5).Macroeconomic policy has a fundamental role toplay in decreasing the likelihood of a devastatingeconomic setback, such as the 2008 globalfinancial crisis, that can lead to retrogressiveoutcomes with regard to human rights. One ofthe contributing factors to the crisis was a lackof adequate regulation in countries with majorfinancial centres—specifically United Statesfinancial markets. 95 These kinds of financial crisiscan be reduced, and their negative consequencescontained, through prudential financial regulation.