Accordingly, policy-makers in individual countries often take global conditions as given. This means they focus on making monetary and fiscal policy choices that best serve their national interests. They may not necessarily internalize all the spillovers those choices might impose on other countries. Now, it’s not always possible or appropriate to act in ways that consider these spillovers.
But it’s important to understand how the policy choices of individual countries collectively determine the overall level of global stimulus and to consider whether that level is appropriate. Accordingly, spillovers are a regular topic on the agendas for international forums like the G7 and G20.