Towards a sustained economic recovery: Review of policy options

This chapter examines some of the main macroeconomic policy stances in developed and developing countries and their policy options. I t shows that not only is the recovery of global growth since the financial crisis rather weak, but also its drivers are inadequate. Indeed, in several major economies, policies intended to spur the recovery are similar to those that led to the latest global crisis in the first place, which raises justifiable doubts about the sustainability of the modest GDP growth attained so far. The chapter then undertakes an empirical modelling exercise to highlight the possible consequences of current policies, and offers an alternative set of policy options. This methodology helps to highlight issues of consistency (or the lack of it) between diverse policies applied at the national level, as well as the interrelationships between the outcomes of those policies in different countries and regions.

Related Subject(s): Economic and Social Development