Tensions in financial markets and severe global imbalances deepen uncertainty and, therefore, profoundly challenge monetarypolicy setting. Precisely these dangers underpin the Mutual Assessment Process of the G20 framework. The indicative indicators – agreed in February this year – identify imbalances in public, private and external positions as the key culprits preventing balanced global growth, and a key input in shaping corrective policies.
Seen in that light, a country’s economic success should be judged also on these indicators and not only on its last few years’ growth figures. However, another imbalance – which has gained currency following the financial turbulence – is income imbalances. Naturally, extremes of income inequality and restricted opportunity challenge our values and strain the fabric of our societies.