Macroeconomic policy cooperation and the G20

Abstract

Has the G20 achieved its goals in macroeconomic cooperation since 2008? The paper organises the G20's efforts under five themes: macroeconomic stimulus, fiscal consolidation, monetary policy, the global financial safety net and global imbalances. The G20 was initially successful in each of these areas, but this success was short‐lived. While the G20 met its goals on macroeconomic stimulus, it has been less successful in reducing deficits and debt. While it was successful in increasing its resources, the global financial safety net remains too small, too fragmented and institutional reform is incomplete. While the G20 succeeded in moving to more market‐determined exchange rates and avoiding competitive devaluations, it struggled to avoid negative spillovers. Despite years of effort, the G20 has made limited progress in reducing global imbalances. Current account imbalances are creeping back to pre‐crisis levels. Public debt remains high and most economies are moving in the wrong direction in correcting imbalances in household savings and debt. The paper concludes that the G20 has done better in some areas than others. But to suggest the G20 is a forum in decline ignores its shift from reactive crisis response to longer‐term structural challenges outside of the pressing need of an immediate crisis.

Twenty years of the G20: Has it changed global economic governance?

“…10 is more reassuring on the comparison with the 1930s. The G20 has been given credit for its contribution to this more benign outcome (see for example Angeloni and Pisani-Ferry, 2012;Véron, 2014;Buti, 2017;Triggs, 2018), primarily for its forceful action in the leaders' first three summits (in Washington DC, London and Pittsburgh). National actions were of course paramount, notably the Troubled Asset Relief Programme (TARP) in the US as well as China's enormous local government infrastructure investment initiative.…”

“…A.1 in the Appendix). Triggs (2018) has undertaken a detailed analysis of policy coordination in the fiscal area, with a focus on debt sustainability.…”

“…After the initial consensus at the London summit in 2009, diagnostic and policy disputes have also largely been dominated by the G7, particularly on financial regulations reforms and the appropriate role of national fiscal policy (Triggs, 2018). EDEs concerns over negative spillovers, particularly those arising from unconventional monetary policy, have not been sufficiently taken into account (Sobel, 2019).…”

The BRICS Agenda on the Internet Governance

“…Note, however, that the preliminary results of that first round get very mixed assessments in the literature. Some experts regard G20 work to be quite successful [Larionova et al, 2019;Dupuis, Nahoum, 2017], while others contend that this work turns less and less prominent and effective as the time passes [Triggs, 2018, Bery, Biondi, Brekelmans, 2019. The aim of the current study is to assess the effectiveness of G20 work in controlling global economic risks and to develop corresponding recommendations.…”

Global implications of a US‐led currency war

“…Macroeconomic cooperation was in abundance in the aftermath of the global financial crisis. G-20 countries coordinated fiscal stimulus, subsequent fiscal consolidation, structural reform, global institutional reform, reforms to strengthen the global financial safety net, reforms to reduce global imbalances, and commitments to improve monetary policy communication (see Triggs, 2018). But the rise of America First, Brexit, and the trade and technology war has seen cooperation replaced with confrontation, solidarity with suspicion, and multilateralism with bilateralism.…”