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The IMF conference called for a much better understanding of macro-financial linkages. The IMF is researching how the financial sector affects the broader economy, but global imbalances raise concerns about future stability.
Governments need to rethink how the financial sector intersects with the broader economy if future crises are to be avoided, economists agreed at a panel discussion at the International Monetary Fund’s recently held Economic Forum.
Strauss-Kahn noted that macro-financial linkages are at the heart of the two-way interactions between the real economy and the financial system. “One of the most important lessons we painfully learned is that we need to have a much better understanding of macro-financial linkages,” he said.
Global imbalances are again beginning to raise concerns, on expert said. Pressures remain in many economies around the world, says Prasad, where many economies, such as