Moreover, the costs of the crisis—lost growth, high unemployment, and sharply higher public debt—will take many years to overcome.
The crisis has also laid bare some fundamental weaknesses in the economic and financial policy framework. Our confidence in markets, institutions, and the status quo turned out to be complacency; we learnt how fallible, fragile, and interconnected we are.
Now that we have emerged from the immediate crisis response period, the time is right to take stock of the lessons of the recent experience, and what they mean for economic and financial policies in the period ahead. We at the IMF have also been contributing to this effort, as reflected in our recent publications on the lessons from the crisis for macroeconomic policy, capital controls, climate policy and other issues.
Today, I’d like to focus on three topics in particular: the need for greater coordination between monetary policy and financial regulation; the need for fiscal adjustment, and for better fiscal stabilizers; and the importance of international policy cooperation. I will also elaborate on the role that the IMF can play in supporting these efforts.