Higher investment, loose monetary policy and structural reforms would all be needed to boost the recovery and ward off the financial stability risks "plaguing" the economy, IMF said.
OECD Chief Economist Catherine L. Mann was explicit: “A stronger collective policy approach is urgently needed, focusing on a greater use of fiscal and pro-growth structural policies, to strengthen growth and reduce financial risks.”
The OECD proposes “changing the policy mix” — a key phrase meaning less austerity and more spending.
“The focus should be on policies with strong short-run benefits and that also contribute to long-term growth. A commitment to raising public investment would boost demand and help support future growth,” Mann said.
Whenever they run out of things to say, today’s central bankers refer to “structural reforms”, although they never say what precisely such reforms would achieve.