PIIE President Adam S. Posen discusses the success of central bank coordination in response to the COVID-19 pandemic but says there are limits to what monetary policy can achieve. Central banks can prevent or offset financial panic but cannot foster economic recovery without effective fiscal policy. Posen examines the effects of monetary policies pursued by advanced economies in recent years, and the unexpected results of the crisis on monetary and fiscal policy in emerging markets. His remarks were in a virtual keynote address at the 2nd Bund Summit, “New Finance and New Economy in a New Situation”, held at The Bund in Shanghai, China.
