The Blurry Frontiers of Economic Policy by Michael Spence – Project Syndicate

The Blurry Frontiers of Economic Policy by Michael Spence - Project Syndicate

Around the world, policies, technologies, and extended learning processes have combined to erode barriers to economic interaction among countries. Pick any indicator: trade relative to global GDP, capital flows relative to the global capital stock, and so forth – all are rising.

CommentsBut economic policies are set at the national level, and, with a few notable exceptions like trade negotiations and the tracking of terrorist funding and money laundering, policymakers set goals with a view to benefiting the domestic economy. And these policies (or policy shifts) are increasingly affecting other economies and the global system, giving rise to what might be called “policy externalities” – that is, consequences that extend outside policymakers’ target environment.

via The Blurry Frontiers of Economic Policy by Michael Spence – Project Syndicate.

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