...Given that the U.S. is at the core of the international monetary system, what happens here would not stay here. It would most likely trigger reactions from other countries while potentially also shaking the conventional functioning of a rule-based global system.
If this is managed in a collaborative manner that balances countries’ domestic and global responsibilities, the result could be the type of generalized policy revamp that is critical for sustaining high and more inclusive growth and for delivering genuine financial stability. But if it is done in an internationally disjointed and uncoordinated fashion, the result would tend toward greater global economic fragmentation. This would reduce both current and future growth and prosperity while increasing the risk of unsettling financial instability down the road.
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