Global Economic Leadership and the Group of Seven

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Institute for International Economics, 1996 - Business & Economics - 167 pages
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Sluggish global growth, frequent currency crises, and huge trade imbalances all reveal the failure of the Group of Seven (G-7) industrial nations to provide effective leadership of the world economy. The G-7 has played this role in the past and must do so again to ensure global prosperity.

Part of the G-7's decline is due to continuing policy differences among the United States, Germany, and Japan. The bigger problem, however, is a new "consensus for inaction" based on fears of trying to counter the huge flows of international private capital, the existence of large budget deficits, and the resistance of central banks to coordination by anyone.

The study offers a comprehensive analysis of all these changes in the world economy and reaches an optimistic reading of the prospects for effective G-7 leadership. It proposes an action program that includes reforming the exchange rate regime, instituting an early warning system to prevent new monetary crises, augmenting the resources of the IMF todeal with private capital flows, and institutional reform of the G-7 itself.

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About the author (1996)

C. Fred Bergsten, senior fellow and director emeritus, was the founding director of the Peterson Institute for International Economics (formerly the Institute for International Economics) from 1981 through 2012. He is serving his second term as a member of the President's Advisory Committee for Trade Policy and Negotiations and was co-chairman of the Private Sector Advisory Group to the United States-India Trade Policy Forum, comprising the trade ministers of those two countries, during 2007-14.

C. Randall Henning was a Visiting Fellow who has been associated with the Institute since 1986. He serves on teh faculty of the School of International Servce, American University. He specializes in the politics and institutions of international economic relations, international and comparative political economy, and regional integration. His research work focuses on international monetary policy, European monetary integration, macroeconomic policy coordination, finance G-7 and G-8 summit cooperation, and regional cooperation in East Asia.

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