Co-ordination in Tense Times: Issues for the G7

Abstract:

This paper discusses what useful form international economic co-ordination might take, notwithstanding the tense climate witnessed in recent months. On international trade, we argue that aiming at wide-ranging negotiations or more-of-the-same trade liberalizations would be pointless under present circumstances.

Priority should instead be given to preventing the doom loop of protectionism and retaliation, and to addressing the political concerns about globalization. On fiscal competition, we point to the risk of a potential race to the bottom despite the progress achieved thanks to the OECD BEPS initiative. We finally emphasize the need for coordinated policies on the demand side.