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Symposium 2014

The Potential of Macroeconomic Surveillance

The Challenge

Recent debt, currency, or banking crises have proven how difficult it is to forecast such events, let alone to prevent them. For example, the fiscal surveillance mechanism in the Euro Area was unable to prevent the Euro debt crisis, still faced by some EU countries. Consequently, the EU and the G-20 have called for strengthening macroeconomic surveillance by means of closely monitoring a broad set of potential imbalance indicators. However, many issues with regard to macroeconomic surveillance are still hotly debated among economists and policymakers. Analyzing the potential of macroeconomic surveillance and developing forward-looking proposals for its improvement, could certainly contribute to a more stable economic system in the future.

What should an optimal macroeconomic surveillance procedure include? Are there approaches such as early warning systems or stress tests, which could serve as best-practice examples? How can it be ensured that the broad variety of potential future crises are captured and that crises are forecast early enough to allow for sufficient counteractive policy measures? How can policymakers react most efficiently to alerting signals from macroeconomic surveillance procedures? How can we ensure that policy measures do not end up fighting symptoms rather than the underlying fundamental problems? How can concrete policy measures to counteract imbalances and potential crises be globally coordinated? Which ways exist to implement a coherent macroeconomic surveillance procedure at a global scale? Are the institutions of the IMF and the G-20 sufficient?

    Proposals

    Proposal
    Symposium 2014

    The Potential of Macroeconomic Surveillance

    Global coordination is the key to effective macroeconomic surveillance. The recent economic crisis has underscored the tremendous interconnectedness of the world’s financial systems and economies. I ...

    Global coordination is the key to effective macroeconomic surveillance. The recent economic crisis has underscored the tremendous interconnectedness of the world’s financial systems and economies. It is therefore increasingly impossible, even for strict “sovereignists” and the eternal doubters, to address locaI problems with national solutions. These days, national problems can easily turn into global ones. Consider, for example, that the global trade-to-GDP ratio has risen from 14 percent in 1970 to nearly 60 percent by 2012, according to the World Bank. That sounds good and dynamic – and it has also been growth-enhancing. However, it also entails complexities of this

    Polity, Academia, Business, Civil Society
    Proposal
    Symposium 2014

    Potential of Macroeconomic Surveillance

    Macroeconomic and (to a certain extent Microeconomic Data Surveillance) is key to the overall strategy and execution for any Economic and Government policies. And this is not only important for a coun ...

    Macroeconomic and (to a certain extent Microeconomic Data Surveillance) is key to the overall strategy and execution for any Economic and Government policies. And this is not only important for a country or sovereign but also to a Region. We have seen how this contagion effect can be borderless from the lesson learned in 1997/1998 Asia Financial Crisis and also the financial crisis in 2008/2009. My key recommendation in this subject matter is not how important and why are the Macroeconomic Surveillance is important (it is given that it is extremely important). BUT what are the best ways to

    Polity, Academia, Business, Civil Society
    Proposal
    Symposium 2014

    Measure and act!

      Is there a need for macro-economic surveillance? Yes. Macroeconomic surveillance is a critical requirement for addressing many of the overarching, current economic challenges. Yet mere surveillance ...

      Is there a need for macro-economic surveillance? Yes. Macroeconomic surveillance is a critical requirement for addressing many of the overarching, current economic challenges. Yet mere surveillance is ineffective, unless followed up with swift intervention for implementing and executing the required policy changes. For example, macroeconomic surveillance can give us valuable information about the significant debt expansion in the public as well as private sectors. It can highlight the sustained trade imbalances between trade surplus countries like China & Germany, and those running trade deficits, like USA and peripheral European countries. Such macroeconomic surveillance will have served its purpose only

    Civil Society

    Background Paper

    Background Paper
    Symposium 2014

    The Potential of Macroeconomic Surveillance

    Polity, Academia, Business, Civil Society

    Virtual Library

    Virtual Library File
    Symposium 2014

    IMF Performance in the Run-Up to the Financial and Economic Crisis – IMF Surveillance 2004-07

    The IEO (Independent Evaluation Office of the IMF) evaluated the surveillance of the IMF in the years before the crisis. Many shortcomings are highlighted like, for instance, the disregard of the role ...

    The IEO (Independent Evaluation Office of the IMF) evaluated the surveillance of the IMF in the years before the crisis. Many shortcomings are highlighted like, for instance, the disregard of the role of the financial sector in a potential crisis. The IEO urges the IMF to focus on crisis prevention and makes several institutional proposals how the IMF can reach this goal.

    Virtual Library File
    Symposium 2014

    Scoreboard for the surveillance of macroeconomic imbalances

    The European Commission proposes a scoreboard consisting of 11 economic variables as a new tool for early warning. Variables are observed country by country and a potential crisis is indicated based o ...

    The European Commission proposes a scoreboard consisting of 11 economic variables as a new tool for early warning. Variables are observed country by country and a potential crisis is indicated based on defined threshold values. The scoreboard is one of the first international indicator systems for crisis prevention.

    Virtual Library File
    Symposium 2014

    Macroeconomic Surveillance for Monetary Policy Management in the SEACEN Countries

    The study reviews the surveillance system of the SEACEN countries with a focus on currency and financial crises. The aim of the study is to enhance cooperation between the SEACEN countries and may als ...

    The study reviews the surveillance system of the SEACEN countries with a focus on currency and financial crises. The aim of the study is to enhance cooperation between the SEACEN countries and may also provide insights for other surveillance systems.

    Virtual Library File
    Symposium 2014

    Overcoming the obstacles to international macro policy coordination is hard

    IMF economists argue that more macroeconomic cooperation will be needed to prevent the next crisis, given the current (still expansionary) stance of fiscal and monetary policies all over the world. Mo ...

    IMF economists argue that more macroeconomic cooperation will be needed to prevent the next crisis, given the current (still expansionary) stance of fiscal and monetary policies all over the world. Moreover, the authors propose ways to overcome present obstacles.