The global crisis—which challenged paradigms about the functioning of financial markets and had significant consequences in other markets—and the sluggish recovery since 2009, are a reminder of the importance of understanding interconnections and risks in the global economy. The increasing trend in global trade, and even more significant, in cross-border financial activities, suggests that spillovers can take many different forms.
The understanding of transmission channels of spillovers has become essential, not only from an academic perspective, but also policymaking. The challenges faced by policy coordination after the initial response to the crisis in 2009—illustrated by the debate on the impact of unconventional monetary policy in emerging economies—raise wide ranging issues on fiscal, monetary, and financial policies.
Filed under: Advanced Economies, Economic Crisis, Economic research, Emerging Markets, Europe, Financial Crisis, Fiscal policy, Globalization, IMF, Politics | Tagged: capital flows, central banks, European Central Bank, exchange rate, Jacques Polak Annual Research Conference, Olivier Blanchard, sovereign debt, spillovers, surveillance, trade, U.S. monetary policy, unconventional monetary policy | Leave a comment »