In new comments , Lagarde said:
First, the need for policymakers to work better together to take into account more fully the impact of these unconventional policies — local and global — and how that affects the path of exit. Second, that “all policymakers, within countries and across countries — have a responsibility to take the full range of actions needed to restore growth and stability.”
“All policy markets” are usually at odds with one another, not just because of academic beliefs, but more because voters play to what they believe will add the largest numbers of jobs, and the greatest prosperity. Voters, of course, are often wrong.
Analysts do not need to look beyond Germany and Japan. The Bank of Japan my be the most interventionist in the world — not surprising because its GDP has stagnated for so long, which was exacerbated by the earthquake and value of the yen. In Germany, both the central bank and ruling party of Angela Merkel have encouraged hands off. No wonder, Germany has suffered less than almost any developed nation in the world as the recession has ended.
Lagarde’s encouragement is only good on paper.
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