This would be good for national economies, and it would also help to resolve global imbalances over time, provided that macroeconomic policies can smooth demand in the short run. Since Boca Raton, we have seen some efforts to increase flexibility in some regions, but progress has been minimal.
This is understandable because, politically, measures to increase the flexibility of labour markets can be very difficult. But labour market rigidities, particularly in Europe and Japan, remain significant barriers to adjustment. The second policy priority is the development of domestic capital and financial markets. The goal is to have markets that are not distorted by capital controls and other interventionist policies.