Geithner Calls For Multilateral Focus On Economic Recovery

By AJ Swartwood

Treasury Secretary Timothy Geithner called upon nations Wednesday to continue to working together to sustain the tenuous global economy as it moves toward recovery. 

In a speech at the Brookings Institution, Geithner hailed the progress the world’s nations have made in collaborating on economic issues calling it “the most productive era of cooperation we have seen in peacetime.” Geithner urged continued efforts to keep the focus on unified, multilateral approaches to solving financial issues.

“The greatest challenge to the global economy today is that the largest economies under-achieve on growth,” he said, mentioning that that projected economic growth of the world in 2011 is projected at around 4%, with the large, developed economies lagging behind. 

Geithner addressed the issue of currency devaluation, with a particular focus on China, and called for an end to the increasingly common practice amongst growing economic powers of reducing currency value.

Although the House of Representatives recently passed legislation that would restrict China’s ability to keep their currency undervalued, concerns still remain, and Geithner acknowledged a need for more multilateral measures to solve the problem.

“China will be less likely to move, to allow its currency to appreciate more rapidly if it’s not confident that other countries will move with it.”

Geithner’s message of multilateralism was appropriate as the world’s financial leaders, the I.M.F. and World Bank are set to begin their annual meetings this weekend. 

Global Meltdown? Every Nation for Itself.

Coffee Brown, University of New Mexico, for Talk Radio News

"Rethinking Global Institutions: Do We Have the International Tools to Fight the Global Economic Crisis?” Well ... no.
The American Enterprise Institute's discussion panel included Brink Lindsey, of the Cato Institute, Marc Busch, a professor in the government department at Georgetown University, and T. N. Srinivasan, from Yale University.
Lindsey said that the global problem is unique within each country, that cultural and political differences would undermine any effort to coordinate monetary strategy, and that this could be a good thing. Allowing each nation to try to muddle though in its own way would reveal which of the competing strategies worked and which did not. If no theory is strong, then Lindsey recommends testing them all empirically. The EuropeanUnion, for example, is testing right now whether a coordinated international economy can weather such a crisis, he said.
All of the board members agreed strongly that no economist understands the complex interplay between parts of the economic system, globally or nationally, even when the individual parts are more or less understood.
Srinivasan opened with an excerpt from John Keynes on the Great Depression, to the effect that we don't really understand all the mechanisms that led to it. Srinivasan pointed out that the proliferation of new financial instruments in the '80s greatly increased the problem. "We don't don't know how it worked when it worked," he said. But, he added, the key to a coordinated effort lies in the common goals; health, education, poverty, and the economy; among nations that differ on almost every other point.
Busch made the case that the present financial institutions, the World Trade Organization, the International Monetary Fund, the United Nations Conference on Trade and Development (UNCTAD), the United Nations Development Programme (UNDP), the International Trade Commission (ITC), and most especially the World bank, have been effective at stabilizing economies, but only at the margins. He took the mediating position that international tools can help, at least a little.