- Gives insight into policy challenges that governments around the world have been facing since the 2008 global financial crisis.
- There is a growing practice of governments resorting to tight monetary and fiscal policies.
- economic growth has been uneven across the world
- developing countries have outstripped the developed ones and remain the engine of growth
- Different sets of economic circumstances prevailing in the two broad categories
- There is vast difference in domestic demand of developed and developing nations
- For countries such as India, the task before policymakers is to rebalance demand from consumption to investment by inducing more people to save.
- On the other hand, in most developed countries, private demand is subdued because of stagnating wages and high unemployment
- There is hardly any justification for the current shift towards austerity,
- Fiscal imbalances were not the cause, but the consequence, of the crisis.
PROBLEMS
- much anticipated reform of the global financial and monetary systems, especially the regulatory aspects, has been slow in coming.
- Financialisation of commodity markets has affected the prices of such basic goods as food staples and energy.
WAY AHEAD
- internationally-coordinated, tighter regulation of financial investors.
- rules-based system to monitor exchange rate movements at the multilateral level.
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