Need to increased international cooperation to overcome global economic difficulties

To address global economic challenges and broaden the distribution of growth's advantages, the Bank of England has recently underlined the importance of expanded international collaboration (Bailey, 2021). The plea for international cooperation echoes a widespread scholarly belief that such efforts are essential for solving the world's economic problems.

Income disparity is one of the most pressing problems facing governments throughout the world today. Income disparity has been linked to slower economic development and social instability in a number of studies (Ostry et al., 2014). The OECD has proposed measures to solve this problem, including more equal sharing of the benefits of economic development and a more progressive allocation of income (OECD, 2019).

The stability of the world's financial markets is another pressing problem. The BIS has stressed the significance of central bank collaboration in preserving international financial stability (BIS, 2019). Due to the interrelated nature of the global financial system, collaboration between central banks is essential for reducing the likelihood and severity of financial crises.

International collaboration is required to handle monetary policy concerns, which is essential for both financial stability and economic growth. (Balli et al. 2017) discovered that better economic outcomes, such as faster economic growth and lower inflation, may be achieved through the coordination of monetary policy.

Cooperation on a global scale, however, is not without its difficulties. Increased collaboration presents a number of issues, one of the most significant being the erosion of national sovereignty that may result from delegating more authority to international organizations (Kahler, 2018). It might be much more challenging to develop a consensus on policy issues if countries have divergent economic and political agendas. 

There are reasons to be hopeful about the potential for enhanced international collaboration despite these obstacles. Policymakers and economists are coming to realise the necessity of coordination and collaboration across countries in ensuring economic stability and prosperity in the wake of the COVID-19 epidemic (Baldwin and Weder di Mauro, 2020).

Finally, the  consensus on the importance of cooperation to overcome global economic difficulties is reflected in the Bank of England's demand for stronger international cooperation. International collaboration and coordination among central banks and policymakers is necessary to address income inequality, financial stability, and monetary policy. Despite ongoing difficulties, the COVID-19 epidemic has brought attention to the value of working together, and there are grounds to be hopeful about the potential for even closer international cooperation.

Refrences:

Baldwin, R. and Weder di Mauro, B. (2020). Economics in the Time of COVID-19. CEPR Press.

Balli, F., Basher, S.A., Ozer-Balli, H. and Qureshi, M.A. (2017). The role of Islamic finance in macroeconomic stability: Evidence from Islamic and conventional finance. Journal of International Financial Markets, Institutions and Money, 50, pp.135-155.

Bank for International Settlements. (2019). Annual Economic Report. BIS.

Bailey, A. (2021). The global outlook and the importance of international cooperation. Bank of England.

Kahler, M. (2018). The Politics of International Economic Relations. 9th ed. Routledge.

Organisation for Economic Co-operation and Development. (2019). Addressing societal challenges using transdisciplinary research. OECD Publishing.

Ostry, J.D., Berg, A. and Tsangarides, C.G. (2014). Redistribution, Inequality, and Growth. IMF.