by Tetsuya Inoue
As the center of gravity for economic growth shifts, the forum for deciding the “rules” governing the global economy is moving from the G7 to the G20. Exchange rate policy is an important domestic policy as well as a means of adjusting the current account imbalances in the long run. Inasmuch as it plays a larger role in emerging economies, I disagree with the idea that the G7 should specialize in the coordination of exchange rate policy. But to the extent that G7 nations have a large advantage in the global financial system in terms of transactions, business presence, and capacity for regulation, the G7 could be utilized as a forum for coordinating financial regulation.
*Organization names and job titles are current as of the publishing dates
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