Policies to Rebalance the Global Economy After the Financial Crisis

Charles Freedman, Michael Kumhof, Douglas Laxton and Dirk Muir

International Journal of Central Banking, 2010, vol. 6, issue 1, 215-252

Abstract: This paper considers some of the main risks and opportunities currently facing the world economy. Against a baseline forecast of October 2009, it first discusses a number of policy mistakes or policy failures that could lead to even worse outcomes than currently envisaged. It then describes the policy choices that would help to support global demand on a more sustainable basis while rebalancing its regional elements and therefore current accounts. Using the United States as an example, the paper also provides estimates of the long-term damage from protracted excessive fiscal deficits, and of the benefits from significant fiscal consolidation.

JEL-codes: E62 F41 F42 H30 H63 (search for similar items in EconPapers)
Date: 2010
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Citations: View citations in EconPapers (2)

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