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Sunday, March 08, 2009

Summers: "Universal demand agenda"

by Calculated Risk on 3/08/2009 09:38:00 PM

Larry Summers is interviewed by the Financial Times: Summers calls for boost to demand

“The old global imbalances agenda was more demand in China, less demand in America. Nobody thinks that is the right agenda now,” said Mr Summers.

“There’s no place that should be reducing its contribution to global demand right now. It is really the universal demand agenda.”

While the US and other western nations should return to living within their means in the medium term, everyone should raise spending sharply now.

“The right macro-economic focus for the G20 is on global demand and the world needs more global demand,” said Mr Summers.
“This notion that the economy is self-stabilising is usually right but it is wrong a few times a century. And this is one of those times . . . there’s a need for extraordinary public action at those times.”
The G20 finance ministers will meet next Saturday (March 14th) in the U.K. in preparation for the full G20 London summit on April 2nd. So Summers is trying to influence the agenda for next week.