Note: The following text is a quote:
http://www.whitehouse.gov/files/documents/g20/Framework_Fact_Sheet_Pittsburgh.pdf
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THE PITTSBURGH SUMMIT: STRONG, SUSTAINABLE, AND BALANCED
GROWTH
President Obama has repeatedly called for the end of this “era of profound irresponsibility” and
for international leaders to take steps, no matter how difficult or unpopular, to ensure when
growth returns, the old imbalances do not.
Today, the G-20 launched a Framework for Strong, Sustainable, and Balanced Growth, a US
proposal. In this Framework, G-20 nations pledged to pursue policies aimed at preventing credit
and asset price cycles from becoming forces of destabilization and to seek a more balanced
pattern of global demand growth. This requires macroeconomic policies that support demand
and decisive progress on structural reforms that foster private demand and strengthen long-run
growth potential. The G-20 nations also agreed to work together to assess how their policies fit
together, to evaluate whether they are collectively consistent with the G-20’s common goals and,
if there are signs of danger, to propose new policies.
Before the crisis, some countries relied too heavily on borrowing for growth, running large
external deficits and building up their international debt. Others relied too heavy on exports for
growth, running large external surpluses and often building up huge reserves. The crisis showed
that this was unsustainable. The U.S. consumer is now likely to save more and spend less, a
necessary change, in the years ahead. That means that U.S. spending alone won’t be able to
propel the global economy forward at the needed speed. A strong, durable recovery requires
shifting from public to private sources of demand to maintain our commitment to fiscal
responsibility – and steps to strengthen domestic sources of growth in countries that previously
drew heavily on exports for growth. Such a strong, durable recovery in turn is essential to
creating jobs here and abroad and to the G-20’s shared commitment to reducing global poverty.
Each G-20 country bears primary responsibility for its own economic management. But each
country’s ability to achieve its goals hinges in part on the actions of others. The Framework
signals a shared recognition among the G-20 that they will need to work together to ensure that
the sum of our national policy choices does not result in a return to old habits by:
• Agreeing that strong global growth requires more responsible borrowing and higher
levels of savings in countries like the United States and policies to increase domestic
sources of growth in today’s external surplus countries.
• Initiating a new process of mutual assessment to evaluate whether the G-20’s policies are
consistent with a more sustainable and balanced pattern and distribution of global growth.
• Committing G-20 nations to put in place macro-prudential regulatory policies to help
prevent credit and asset price cycles from becoming destabilizing forces in the future.
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These efforts will supplement the robust regulatory reforms the G-20 committed to
implement today.
• Asking the IMF to evaluate whether policies pursued by individual G-20 countries are
collectively consistent with a more sustainable and balanced trajectory for the global
economy and, if needed, recommend how policies could be adjusted to improve the
global outlook.
Note: The following text is a quote:
http://www.whitehouse.gov/files/documents/g20/Pittsburgh_Fact_Sheet_Recovery.pdf
THE PITTSBURGH SUMMIT: BOLD AND COORDINATED ACTIONS
FROM CRISIS TO RECOVERY
At the time of the last G-20 Summit in April, the world appeared potentially on the brink of
depression. To prevent that from happening, the G-20 Leaders came together in London and
pledged to do whatever it took to restore confidence, growth and jobs.
The forceful response of the G-20 has worked. Their bold, coordinated action to jumpstart
recovery and repair the financial system have started to yield concrete results for families,
businesses and the most vulnerable individuals and governments. Based on International Labor
Organization (ILO) estimates, the actions G-20 nations have taken since the London Summit will
have saved or created over 7 – 11 million jobs by the end of 2009. The President’s Council of
Economic Advisors has reported that implementation of the American Recovery and
Reinvestment Act (ARRA) has already saved or created over 1 million jobs in the United States.
While there is much more that needs to be done to restore jobs, confidence and growth, the G-
20’s actions have clearly halted a sharp fall in economic activity and laid the basis for a recovery.
GDP: At the time of the last G-20 meeting, real GDP had fallen 7.4% (at an annual rate) in the
first quarter of 2009 in G-20 economies. Leading up to the Pittsburgh Summit, real GDP rose
1.8% in the second quarter. In the U.S., the first quarter real GDP decline of 6.4% (at an annual
rate) slowed to a 1.0% decline in the second quarter. The Blue Chip Economic Indicators
September survey forecasts a 3% GDP growth rate in the third quarter.
Jobs: In the three months leading up to the London Summit, the unemployment rate across the
G-20 had increased 0.9 percentage points. It had increased 1.3 percentage points in the United
States. In the United States, as in many other countries, unemployment is still unacceptably
high. But it is not rising as fast as it was prior to the April summit. The most recent data shows
that the unemployment rate increased by a much slower 0.3 percentage points over the past three
months in both the G-20 at large and the United States.
Financial Markets: A key indicator of the risk of long-term lending to emerging markets,
EMBI, has fallen by close to half, with the premium emerging markets pay to borrow dropping
from 6.44% on the eve of the London summit to around 3.3%. The cost of insuring against the
default on banks’ long-term debt has fallen by more than half, and the interest rate banks have to
pay to borrow short-term funds (Libor) is down even more. The Case-Shiller home price index
in the United States increased 1.3% following the London Summit, compared to a 7% decline
prior to the Summit.
Consumer Confidence: In the United States, a leading consumer confidence index rose to over
54 in August from the 26.9 reported in March by the Conference Board. A survey of G-20 nation
consumer confidence surveys has found that consumer confidence has risen since the lowest
point reported during the crisis in all thirteen countries with comparable data.
Exports: In March of 2009, G-20 goods exports were 10.7% lower than in December of 2008 –
a pace of decline that if sustained, implied a 36% annual fall. In the most recent data (July), G-
20 goods exports were 9.6% higher than in April. That strong turnaround is mirrored in the
United States. In March, goods and services exports were 7.5% lower than in December 2008.
In July, goods and services exports were 5.8% higher than 3 months earlier.