Second, the theory and practice of mainstream macroeconomics has become more international in focus. This trend will surely continue, in response to the course of events. Not only have the effects of bad loans to American home buyers had reverberations much further afield, but the rapidly growing size of the emerging world is affecting economic activity and prices far beyond their own borders.
But before doing so, I must say that after the global economic crisis, the buzz word all over is macro-prudential supervision. It is built on the clear lessons of the crisis that a set of financial institutions that are sound on a stand alone basis is not an assurance of financial stability.