Skip to footer

Job creation and global economic rapport

Last week's gathering of top central bankers reflects how much governments have learned to work together since the Great Recession to prevent 'spillovers' of their economic and financial actions.

|
AP Photo
International Monetary Fund Managing Director Christine Lagarde, left, and Federal Reserve Chair Janet Yellen prepare to walk off stage following a conversation at the IMF in Washington July 2.
  • By the Monitor's Editorial Board

Top central bankers from around the world gathered last week in Jackson Hole, Wyoming. No big news came of their regular summer meeting in the Tetons, other than a hard look at each nation’s latest strategy for job growth. Yet a certain trend has emerged among these powerful managers of the world’s money supply. They may be more sensitive to how their domestic decisions, such as raising interest rates, influence other nations.

This mutual empathy for “spillover” effects could be a good result of the 2007-09 financial crisis. That crisis compelled the big nations to coordinate economic policy in order to prevent a global depression and a rise in trade protectionism. Since then, governments have also come up with a few global remedies, such as requiring big banks to keep more cash on hand.

Such strong unity of purpose and careful listening beyond one’s borders was only last seen in the years right after World War II, when a system of global economic governance was set up under American leadership. As other nations have caught up with the United States, policy coordination has become more complex – and more necessary. One reason: Over the last century, there have been more financial crises than major wars between big powers.

In the 1970s, the G-7 group of nations tried to coordinate economic policy with mixed effect. Later a large grouping, the G-20, sprung up. Two years ago, the International Monetary Fund set up a surveillance system to track decisions by big economies for their potential global impact.

“If policies are viewed only from a national perspective,” said IMF Managing Director Christine Lagarde, “we may end up in a world of ad hoc intervention, less rebalancing, and the potential to export financial instability.”

In July, the new head of the US Federal Reserve, Janet Yellen, said that the Fed would “make sure” that its expected raising of interest rates would go “smoothly” for other nations. China, too, has shown some sensitivity to global opinion by lessening government control over its currency rate.

This ability by more nations to see the other’s good before taking action is just one way to head off another shock to the world economy. Each nation must also improve its economic fundamentals.

Nations are no longer economic islands unto themselves, nor can they ignore the waves they might create.

You've read  of  free articles. Subscribe to continue.
Real news can be honest, hopeful, credible, constructive.
What is the Monitor difference? Tackling the tough headlines – with humanity. Listening to sources – with respect. Seeing the story that others are missing by reporting what so often gets overlooked: the values that connect us. That’s Monitor reporting – news that changes how you see the world.
editor@csmonitor.com
Subscribe
Mark Sappenfield
Editor

Dear Reader,

About a year ago, I happened upon this statement about the Monitor in the Harvard Business Review – under the charming heading of “do things that don’t interest you”:

“Many things that end up” being meaningful, writes social scientist Joseph Grenny, “have come from conference workshops, articles, or online videos that began as a chore and ended with an insight. My work in Kenya, for example, was heavily influenced by a Christian Science Monitor article I had forced myself to read 10 years earlier. Sometimes, we call things ‘boring’ simply because they lie outside the box we are currently in.”

If you were to come up with a punchline to a joke about the Monitor, that would probably be it. We’re seen as being global, fair, insightful, and perhaps a bit too earnest. We’re the bran muffin of journalism.

But you know what? We change lives. And I’m going to argue that we change lives precisely because we force open that too-small box that most human beings think they live in.

The Monitor is a peculiar little publication that’s hard for the world to figure out. We’re run by a church, but we’re not only for church members and we’re not about converting people. We’re known as being fair even as the world becomes as polarized as at any time since the newspaper’s founding in 1908.

We have a mission beyond circulation, we want to bridge divides. We’re about kicking down the door of thought everywhere and saying, “You are bigger and more capable than you realize. And we can prove it.”

If you’re looking for bran muffin journalism, you can subscribe to the Monitor for $15. You’ll get the Monitor Weekly magazine, the Monitor Daily email, and unlimited access to CSMonitor.com.

Subscribe to insightful journalism

QR Code to Job creation and global economic rapport
Read this article in
https://www.csmonitor.com/Commentary/the-monitors-view/2014/0824/Job-creation-and-global-economic-rapport
QR Code to Subscription page
Start your subscription today
https://www.csmonitor.com/subscribe