Abstract
The IMF’s latest reading of the global economy shows once again a weakening baseline. Volatile financial markets and low commodity prices create fresh concerns about the health of the global economy. What is needed is a three-pronged approach through monetary and fiscal policies, as well as structural reforms to strengthen the baseline and guard against the risks. In addition, collective global action should play a supporting role in helping leverage individual country action. We need to avoid negative sum and zero sum economic policies. Now is the time to decisively support economic activity and put the global economy on a sounder footing. This requires some tough choices, with advanced economies in particular needing to step up to the plate. At the IMF, we will need to revisit how we can help strengthen and broaden our global precautionary financing instruments. We will also be taking another look at policies to address financial account risks, including macroprudential and capital flow management measures.
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