Globalization and the Art of Designing Policy
Globalization has thrown a spanner in the way national policies are crafted. Whether it be a decision concerning quantitative easing in an EU economy, the hiking of rates by the U.S. Fed, fiscal policy design by India, or an exchange rate intervention by the People’s Bank of China – in today’s world, a critical element is the awareness that what you do will impact other countries and that in turn may cause a backlash which will come to have an impact on growth, employment and inflation in your own economy. This lecture will take examples from contemporary policy challenges in rich industrialized countries and also emerging economies to illustrate how we can design effective policy in this changed scenario. It will highlight some of the open challenges that we will no doubt have to confront in the coming years.