Looking to the near-term, demand management measures also have a role to play in supporting growth outcomes globally. In many advanced economies, negative output gaps and low inflation trends allow for a continuation of accommodative monetary policies, and in some instances for more expansionary fiscal policies.
In many emerging markets, however, the scope for both monetary and fiscal easing has narrowed, as policy makers look to manage rising vulnerabilities. In many cases cyclical policies need to move in sync with structural reform measures aimed at boosting potential growth in the medium-to-long term. Globalisation and interconnectedness are key features of the world economy.