Publication

This policy brief discusses innovations in global governance needed to tackle the very large payments imbalances that characterize the world economy. According to the author, innovation is needed because of the distinct geography of contemporary imbalances, the dollar's changing position as world currency, and the growing influence of sovereign wealth funds. Some suggested innovations include widening the G8; creating an International Monetary Fund or European Central Bank substitution account to ease the shift away from a dollar-centered international monetary order; fostering a greater recognition of the role of regions in global financial governance; and negotiating new multilateral rules for investment flows.