Five years on, the global financial crisis continues to cast a pall on a global economy that remains dangerously unbalanced and is threatened by new fragilities. The euro zone remains in crisis, with policy responses to date that address only the symptoms of the problem — not the underlying institutional and governance weaknesses. The result has been higher unemployment that, in some euro zone countries, is now at levels rivalling the Great Depression. In contrast, the US economy has continued its steady — albeit tepid — recovery, with unemployment slowly trending down over time. The US fiscal situation is less encouraging, with public debt on an unsustainable path over the medium term and, absent a resolution of the debt-ceiling impasse, a looming fiscal shock in the form of expiring tax cuts. Taking place days after the US presidential election, set for November 6, CIGI ’12 will be an opportune time to consider the impact of fiscal constraints facing the president, whoever that might be. Although China, Brazil and India rebounded quickly from the crisis, new concerns about the prospects for growth have surfaced, and worries remain about how these dynamic emerging economies would be affected by a new round in the currency wars that erupted in response to the quantitative easing employed by advanced economies’ central banks.

The session will review efforts to secure a timely rebalancing of global demand that promotes strong, sustainable and balanced growth, consistent with the G20’s Mutual Assessment Process. This rebalancing would reduce the risk of insufficient global aggregate demand and dissipate the threat of deflation/disinflation in countries that need to undertake difficult, sustained fiscal adjustments. Failure to achieve these fundamental adjustments could undermine the support for the open, dynamic international trade and payments system that has raised living standards for so many around the globe, as individual countries retreat to policies intended to insulate themselves from global risks, but which, collectively, constitute beggar-thy-neighbour measures, destructive of national and international prosperity.

Chair: James Haley, Inter-American Development Bank, frm. Director, CIGI Global Economy Program

Panellists:

• Jørgen Elmeskov, The Organisation for Economic Co-operation and Development (confirmed)
• Stephen Pickford, Chatham House (confirmed)
• Gordon Thiessen, Bank of Canada (confirmed)
• Mark Thirlwell, Lowy Institute for International Policy (confirmed)
• John Williamson, Peterson Institute for International Economics (confirmed)