ON THE INTERNATIONAL COORDINATION OF MACRO POLICIES

Abstract

Although international coordination of macroeconomic policy-making sounds like a way to improve international relations more generally, there is a serious risk that it will have the opposite effect. An emphasis on international interdependence instead of sound domestic policies makes foreign governments the natural scapegoats for any poor economic performance. Pressing a foreign government to alter its domestic economic policies is itself a source of friction and the making of unkeepable promises can only lead to reaentment. It woule in general be far better if the major industrial countries concentrated on the pursuit of sound domestic economic policies and reserved the pursuit of international cooperation for those subjects like international trade and national security in which cooperation is truly essential.
M. S. Feldstein
Journal of Economic Perspective, Spring 1988, p. 12