Politics and Economic Outcomes
These changes in tum complicate economic management. A given amount of fiscal stimulus has less effect. Monetary policy moves can be offset by developments overseas. Recessions in other countries can spill over to the United States as export demand dries up. These changes have Jed to increasing attempts by industrial countries to coordinate their policies. The attempt to form a single European currency, the increasing regular meetings of the so-called group of seven industrial nations, the increasing importance of GAIT and the IMF, and increasing coordination between the central banks of the major industrial nations are all road signs on the road to an integrated international economic policy.