History can repeat itself. The last two decades have seen monetary policy as dominant policy while fiscal policy has taken a back seat. The ongoing financial crisis may well sow the seeds of a return to fiscal dominance. In addition, there are renewed calls for greater international policy coordination. While cooperation is desirable, coordination often breaks down, as it did with the Bretton Woods regime some politicians are hoping to revive in a form that has yet to be determined. There are considerable risks that accompany both developments based on the historical experience and the tendency for countries to defend their sovereignty over financial and monetary matters.

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