ECON216_Spring2011_Tutorials_Macroeconomic_Coordination_Article

ECON216_Spring2011_Tutorials_Macroeconomic_Coordination_Article

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Unformatted text preview: 3 THE BROOKINGS INSTITUTION • GLOBAL ECONOMY AND DEVELOPMENT PROGRAM Framing the Issue The.G-20.leaders.meet.in.Seoul.at.the.end.of.the.first. decade.of.the.21 st .century.and.at.a.highly.uncertain. and. unusual. time. for. global. policymakers..The. de- pression.that.threatened.the.world.economy.in.2008. has.been.averted.and.the.G-20.played.a.significant. role. in. the. global. policy. response,. as. symbolized. most.notably.by.the.2009.London.Summit..It.is.im- portant.to.stress.at.the.outset.that.the.utility.of.the. G-20.leaders.meetings.should.not.be.evaluated.only. by.what.happens.at.the.meeting.itself,.but.by.looking. at.the.whole.process.that.leads.up.to.the.summits..In. the.weeks.leading.up.to.the.London.Summit,.the.im- mediate.challenge.was.to.ensure.that.a.broadly.coor- dinated.global.fiscal.expansion.took.place—one.that. was.sufficient.enough.to.compensate.for.the.collapse. in.private.demand.triggered.by.the.worldwide.pan- ic.and.coordinated.enough.so.that.leakages.abroad. would.not.frustrate.national.efforts..At.the.time,.it.also. appeared.urgent.to.give.the.IMF.enough.financial.fire. power.to.prevent.the.crisis.that.had.erupted.in.the. advanced.countries.from.spreading.to.the.emerging. markets..The. London. and. then. Pittsburgh. meetings. also.helped.launch.the.longer-term.work.toward.Ba- sel.III.and.reforms.in.the.financial.sector.. The. Seoul. meeting. faces. a. substantially. different. world. economy. and. an. altered. set. of. challenges. than.those.of.London.and.Pittsburgh..While.there.are. many.important.issues.to.discuss.at.Seoul,.such.as.de- velopment,.financial.sector.supervision.and.Basel.III,. I.will.specifically.focus.on.the.key.interrelated.mac- roeconomic.policy.challenges,.which.are.critical.and. urgent.for.the.upcoming.meeting.. Policy Considerations Much.is.at.stake.in.Seoul.for.macroeconomic.policy.. The.G-20.will.survive.and.meet.again.in.Paris.in.2011,. but.whether.it.can.really.become.a.steering.group.for. the.world.economy.and.strengthen.international.eco- nomic. cooperation. depends. to. a. significant. degree. on.the.Seoul.meeting.and.its.aftermath.. THE G-20 AND MACROECONOMIC POLICY COORDINATION AT THE CROSSROADS A MACROECONOMIC AGENDA FOR THE G-20 Kemal Derviş THE G-20 SEOUL 2010 SUMMIT: STRENGTHENING THE GLOBAL RECOVERY 4 The. first. macroeconomic. challenge. remains. that. of. fiscal.policy.coordination,.but.in.a.context.different. from.that.of.2009.and.amidst.renewed.concerns.that. large.current.account.imbalances.are.a.key.dimen- sion. of. the. overall. macroeconomic. policy. coordi- nation. challenge.. U.S.. Treasury. Secretary. Timothy. Geithner’s. proposal. made. at. the. October. 23-24. fi- nance.ministers.meeting.for.“current.account.target....
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This note was uploaded on 03/19/2012 for the course ECON 215 taught by Professor Rodgers during the Three '08 term at University of Wollongong, Australia.

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ECON216_Spring2011_Tutorials_Macroeconomic_Coordination_Article

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