The Former US Treasury Secretary Larry Summers urged the world leaders to form global growth strategy in tackling the economic stagnation. He also directed the focus of the US government to increase investment spending and the exports of energy resources. In his analysis Summers commented the meeting of central bankers, finance ministers and representatives of the International Monetary Fund, which will be held in Washington.
“In USA the cases of significant investment promotion will give a striking effect. Spending on infrastructure will reduce the burden on future generations not only by stimulating growth, but also by expanding the capacity of the economy and reduce deferred maintenance obligations”, told Larry Summers. “The government can not do much without increasing costs – by encouraging private investment, including by allowing the export of oil and gas”, he added.
The global financial crisis in 2008 led to significant changes in the monetary policies of banks around the world. The problems provoked lowering interest rates to record levels in order to stimulate lending and costs. According to Summers the programs for the purchase of assets of central banks have been a better solution of the strategies introduced during the Great Depression of 1930. However, they did not affect mandatory everywhere on the tendency of rising costs.
In September last year, the former US Treasury Secretary unexpectedly announced that he refuses to participate in the contest for the position of Ben Bernanke as Chairman of the Fed. His refusal has forced President Barack Obama to reverse at the other potential candidates, which subsequently gave the position to Janet Yellen.