Is There An Optimal Policy Mix To Get The Global Economy Out Of The Current Difficult Conjuncture?

by Brunello Rosa and Nouriel Roubini

28 March 2022

In this paper we discuss:

• The two supply-side shocks that hit the global economy since 2020: the pandemic and the war in Ukraine;
  
• The policy response to the pandemic: fiscal-monetary policy coordination was the real policy innovation;
  
• The response to the pandemic: an uncoordinated division of labour between governments and central banks;
  
• How these policy objectives may prove conflicting: lower inflation, higher growth, debt monetisation and punishing Russia;
  
• How policymakers may lack instruments to achieve all these policy goals;
  
• How adopting those instruments may prove counter-productive for achieving other goals;
  
• Why an optimal policy mix may not exist and policymakers may have to accept sub-optimal outcomes; and
  
• The market implications of all the above.
  

Contact us to obtain the password to open the PDF