This new approach—which analyzes clusters of economies that have strong interlinkages or common concerns—complements the institution’s current approach to surveillance, which up until now has consisted of bilateral surveillance (the on-the-ground appraisal of individual member countries) and multilateral surveillance (the high-altitude oversight of the world economy). The pilot project attempts to fill a gap between these two types of monitoring.
Called “cluster consultations,” the analyses look at logical groupings of economies and consider the policies of these countries in an integrated way. The reports aim to highlight shared concerns and policy lessons to policymakers and, where relevant, how shocks propagate and how countries can potentially benefit from policy coordination. In this way, the reports help inform what is needed at the national level.
In the following interview, Helge Berger and Thomas Dorsey of the IMF’s European Department discuss the Nordic Regional Report, the first cluster report to be issued as part of the pilot project. Topics for future reports are still under consideration.
IMF Survey : What do cluster reports contribute to IMF surveillance?
Berger: The quest for bringing together bilateral and multilateral surveillance is an old one, and the IMF has been experimenting with different formats.
The spillover reports produced since 2011 are a good example of international surveillance, looking at how policies in the United States, euro area, China, Japan, and the United Kingdom affect each other and the wider global economy.
But our member countries still felt that there was a gap—that there should be some approach to cover the “sweet spot” between high-altitude perspective of the spillover reports and our country assessments, known as the Article IV consultation. So we have begun looking at “clusters” of countries, where common issues and experiences are brought together to illuminate the IMF’s annual assessments of individual countries. In the Nordic Regional Report—which looks at Denmark, Finland, Norway, and Sweden—we focus in particular on the region’s banking sector and the interdependencies and policy issues that come with it.
IMF Survey : Why did you choose to focus on these four...