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From convoy to parting ways? Post-crisis divergence between European and US macroeconomic Policies

  • Jean Pisani-Ferry
  • Adam Posen

The response in 2008-09 to the global financial crisis was in many ways a high water mark for transatlantic policy coordination. The major economies of the EU and the US rapidly agreed on a series of measures to limit the crisis. However, the common approach has since unraveled. This paper explores why the London consensus has not survived for much more than a year.In response to this situation this working paper suggests a critical quantum of coordination. Key measures include a commitment to avoiding deliberate currency depreciation and unilateral intervention; agreement to give the IMF an enhanced monitoring role; the adoption by parliaments of medium-term fiscal plans ; and cooperation on the issue of Chinese undervaluation.

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Paper provided by Bruegel in its series Working Papers with number 498.

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Date of creation: Feb 2011
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Handle: RePEc:bre:wpaper:498
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  1. Joseph E. Gagnon & Matthew Raskin & Julie Remache & Brian P. Sack, 2010. "Large-scale asset purchases by the Federal Reserve: did they work?," Staff Reports 441, Federal Reserve Bank of New York.
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  6. Woodford, Michael, 2001. "Fiscal Requirements for Price Stability," Journal of Money, Credit and Banking, Blackwell Publishing, vol. 33(3), pages 669-728, August.
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  8. Adam S. Posen & Jean-Pisani Ferry (ed.), 2009. "Euro at Ten: The Next Global Currency?, The," Peterson Institute Press: All Books, Peterson Institute for International Economics, number 4303.
  9. Olivier Jean Blanchard, 1990. "Suggestions for a New Set of Fiscal Indicators," OECD Economics Department Working Papers 79, OECD Publishing.
  10. Benassy-Quere, Agnes & Coeure, Benoit & Jacquet, Pierre & Pisani-Ferry, Jean, 2010. "Economic Policy: Theory and Practice," OUP Catalogue, Oxford University Press, number 9780195322736.
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  13. Jean Pisani-Ferry & Adam Posen, . "The euro at ten: the next global currency?," Books, Bruegel, number 303, November.
  14. Daniel J. Wilson, 2010. "Is the recent productivity boom over?," FRBSF Economic Letter, Federal Reserve Bank of San Francisco, issue sep20.
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