By Olivier Blanchard 1
The Group of Twenty industrialized and emerging market economies (G-20) has broken new ground over the past year or two. It has embraced the type of collaborative approach to policy design and review that is well suited to today’s interdependent world, where policies in one country can often have far-reaching effects on others.
Collective action by the G-20 in response to the recent crisis was critical in avoiding a catastrophic financial meltdown and a potential second Great Depression. Exceptional policy responses around the globe—including macroeconomic stimulus and financial sector intervention—indeed helped avoid the worst. These actions were notable, both for their scale and force, but also for their consistency and coherence.
Keen to build on this success, G-20 Leaders pledged at their 2009 Pittsburgh Summit to adopt policies that would ensure a lasting recovery and a brighter economic future. To meet this goal, they launched the “Framework for Strong, Sustainable, and Balanced Growth.” The backbone of this framework is a multilateral process, where G-20 countries together set out objectives and the policies needed to get there. And, most importantly, they undertake a “mutual assessment” of their progress toward meeting those shared objectives. With this, the G-20 Mutual Assessment Process or the “MAP” was born.
Filed under: Advanced Economies, Economic Crisis, Emerging Markets, Financial Crisis, G-20, Globalization, IMF, International Monetary Fund, Multilateral Cooperation | Tagged: advanced economies, alternative policy scenarios, balanced and sustainable growth, collective action, emerging economies, financial crisis, financial sector intervention, fiscal consolidation, G-20, G-20 MAP, G-20 mutual assessment process, global financial linkages, global recovery, Hamid Faruqee, Krishna Srinivasan, macroeconomic frameworks, macroeconomic stimulus, policy challenges, policy coordination, private demand, public debt, rebalance global economy, structural reforms, supply constraints, sustainable growth, unemployment | 18 Comments »