"After the Storm?" was the main title of the editorial of Economic Outlook 83 published by the Organization for Economic Cooperation and Development (OECD) in Paris last May. Developments since then have been such that it would have been a disaster for OECD forecasters if the question mark had not been placed at the end of the title.
True, the editorial warned that several quarters of weak growth lay ahead for most OECD countries. But instead of weak growth, a number of major economic powers such as the United States, Japan and Germany have since been experiencing negative growth. The main title for Economic Outlook 84 published in late November is "Managing the Global Financial Crisis and Economic Downturn."
The recent Group of 20 meeting of political leaders in Washington stressed the importance of reforming financial market supervision and regulation, and called for an action plan to this end. Such action is necessary for crisis prevention in the future. But in the meantime, major countries need to strengthen their crisis management through internationally well-coordinated actions to improve the function of their domestic financial markets and systems, and through active macroeconomic policies to restore economic growth and create jobs.