A Global Economic Shock Needs a Global Solution
National policy measures alone are unlikely to prove sufficient in combating the effects of the coronavirus.
Supply and demand will be difficult to restore.
Photographer: AFP/Getty Images
Policy makers are playing catch-up and seeking to minimize further disruptions as the coronavirus causes cascading domestic and international economic stops. How they approach this challenge will matter almost as much as what they do to counter the increasing risk of global recession and financial instability.
Indications of a policy call on Tuesday involving ministers of finance and central bank governors of the Group of Seven is, I suspect, just one of several efforts to compare and contrast what individual countries are experiencing and what they see as immediate policy priorities. While I have no knowledge or confirmation, I strongly suspect that discussions are also taking place among central banks, a traditionally more close-knit part of the economic policy apparatus, as well as possibly the Group of 20. All this supplements the notable step-up in national and local policy efforts now that there is clear evidence of the damage to supply and demand and the risk of financial disruptions.