in the near future, and some analysts already estimate significant odds for an imminent or even ongoing recession in those economies. although a global economic contraction is not the baseline scenario for most forecasters, the continuation of downward revisions to growth projections for advanced countries would definitively affect the economic prospects for the rest of the world. for an analysis of the current deviation of u. s. output from its secular trend and a comparison with that of the great depression, see robert e. lucas, jr., “ the u. s. recession of 2007 – 201? ”, milliman lecture, university of washington, may 19, 2011. bis central bankers ’ speeches possible explanations what lies behind the disappointing upturn in industrialized economies? a striking feature of the weak and deteriorating nature of the recovery in these countries is that it has occurred in spite of unprecedented expansionary fiscal and monetary policy stances. large public deficits have resulted from automatic stabilizer mechanisms as well as from special tax relief programs and higher government expenditures, including bailouts of troubled financial and non - financial institutions, aimed at stabilizing financial markets and promoting aggregate spending. in addition, monetary policy has remained extraordinarily accommodative during recent years. central banks from the main industrialized countries have combined remarkably low policy interest rates with an increase and change in the composition of their balance sheets. the leader in expansionary monetary policy has been the u. s. federal reserve, which has maintained the federal funds rate close to zero since the end of 2008, and has also implemented large purchases of government bonds and private financial assets funded through higher voluntary bank deposits during the last four years. among other objectives, through the purchase of financial assets, the fed sought to meet the extremely high liquidity demand shown by the public during the financial crisis and, more recently, to lower long - term interest rates in order to stimulate private financing and investment. other monetary authorities have implemented similar practices. the european central bank has participated actively in the markets in an attempt to stabilize the sovereign bond prices of countries experiencing fiscal difficulties. while the extraordinary actions undertaken by the fed as a lender of last resort during 2008 appear to have contributed effectively to the normalization of non - bank financial markets, the impact of accommodation by this and other central banks on aggregate demand has been less clear. questions arise in light of the ambiguous effects of monetary policy on long - term interest rates, the still weak credit channels of monetary policy transmission, and poor output performance and

balanced approach to policy rest on a number of merits. among these, it is worth noting the potential to exploit the synergies of multiple policies acting simultaneously. 3 in addition, reliance on a multi - pronged strategy reduces the likelihood of an over - burden of policy instruments when these are used in isolation, 4 while the possibly adverse effects on the overall performance of the economy arising from the implementation of some policies may be compensated by action in other fronts. see gaspar, vitor, maurice obstfeld and ratna sahay ( 2016 ) : “ macroeconomic management when policy space is constrained : a comprehensive, consistent, and coordinated approach to economic policy ”, imf staff discussion note no. 16 / 09, september. see davig, troy and refet s. gurkaynak ( 2015 ) : “ is optimal monetary policy always optimal? ”, federal reserve bank of kansas city research working paper no. 15 - 05, july. seen from the perspective of monetary policy, which are the key areas for coordination that deserve to be underlined? a first one is exchange rate policy. in theory, flexible rate regimes allow countries the implementation of a fully autonomous monetary policy. in addition, they are widely regarded as an efficient mechanism for the adjustment of the economy to external shocks. nonetheless, as volatile flows of capital across borders have led to acute swings in exchange rates, doubts have emerged as to the degree to which such frameworks isolate economies from developments abroad. in particular, sharp fluctuations of the exchange rate can have significant effects on the real economy, domestic prices and the financial sector, especially in emes. of course, this does not imply that floating rates should be discarded in favor of alternative regimes. instead, the issue is how to increase the efficiency of floating exchange rates during episodes of disruptive volatility. a frequently noted option is the temporary use of complementary intervention mechanisms to support the adequate functioning of currency markets. 5 fiscal policy is a second crucial area of coordination for monetary policy. the erosion of space following the global financial crisis, in combination with the end of the commodities boom that preceded it, has to a large extent constrained the role of fiscal policy in many emerging market economies. in light of the extant evidence, both theoretical and empirical, suggesting the pernicious effects that weak fiscal positions can have on the overall performance of the economy, for instance through an adverse impact on see blanchard, olivier, giovanni dell'ariccia and paolo mauro ( 2013