Posted by Ravi Gulati | Posted in Economy & Markets | Posted on 26-08-2013
Two papers presented in Jackson Hole urged central bankers to think of the international repercussions of their own domestic policies. Christine Lagarde, managing director of the International Monetary Fund, also delivered a speech calling for more international cooperation.
“No country is an island,” she said. “In today’s interconnected world, the spillovers from domestic policies … may well feed back to where they began. Looking at the wider effect is in your self-interest. It is in all of our interests.”
It’s not uncommon for smaller, emerging economies to coordinate monetary policy efforts. Countries from the Balkans, the Black Sea region and Central Asia for instance, created a central bankers club that meets to discuss how to align their policies.
Members include Turkey, Russia, the Czech Republic, Romania, Albania and Kazakhstan, to name a few.
“We have been coordinating policy before the crisis and during the crisis, and I think it is also time now to coordinate the policies after QE3,” said Ardian Fullani, governor of the Bank of Albania.