Selected for the Global Economic Symposium 2010

Since 2007, we have witnessed a series of financial shocks – at the household, firm and country levels – to which policy makers have reacted vigorously with the aim of restoring confidence to the global markets. Nevertheless, the recent Eurozone turbulence indicates that this aim has not been achieved. Policy makers and financial market participants are not agreed on whether fiscally vulnerable countries should be allowed an orderly debt restructuring, whether Euro rescue packages should make such restructuring superfluous, or whether new policy approaches could obviate the need for restructuring without requiring rescue packages.

* What policy approaches are particularly promising?
* How can the gap between market expectations and government policy responses be bridged?

This panel will explore these issues, with a view to providing proposals on how such currency-area problems can be fruitfully addressed in the future.