Over the past year, international macroeconomic and monetary cooperation has been tested by the challenges raised by diverging monetary policies in the advanced economies. Although the risks caused by both continued monetary accommodation in several countries (notably in Europe) and tightening in the US have been carefully identified and clearly discussed by the BIS and the IMF among others, there are few signs that effective action has been taken by policymakers to dispel the specter of currency wars and financial market instability.
Furthermore, the escalation of the Greek crisis during the summer further attests to the problems in international macroeconomic cooperation. Although the Greek crisis is primarily a European problem, its potential spillover effects for international economic growth cannot be easily dismissed. From this perspective, the international community has largely failed to put pressures on European partners to address the Greek crisis in a timely and effective manner.