In addition, this week’s G-20 summit should provide the road map for a more stable and effective international financial system. In the meantime, the freefall in domestic demand and an atmosphere of exceptional uncertainty has created an intense need for massive, credible policy action. This need is being met – there has been an unprecedented monetary and fiscal response.
The effects of these policies will build over time and will be felt with full force next year. Decisions to provide additional stimulus must be carefully considered. It is paramount to retain the credibility of fiscal and monetary policy frameworks.