In 2011, the International Monetary Fund invited prominent economists and economic policy makers to consider the brave new world of the post-crisis global economy. The result is a book that captures the state of macroeconomic thinking at a transformational moment.

The crisis and the weak recovery that has followed raise fundamental questions concerning macroeconomics and economic policy. For instance, to what extent are financial markets efficient and self-correcting? How crucial is low and stable inflation for growth and the real stability of the economy? How strong is the case for open capital markets? Too often, the standard models provided insufficient guidance on how to respond to the unprecedented situations created by the crisis. As a result, policy makers have been forced to improvise. What to do when interest rates reach the zero floor? How best to provide liquidity to segmented financial institutions and markets? How much to use fiscal policy starting from high levels of debt?

These top economists discuss future directions for monetary policy, fiscal policy, financial regulation, capital account management, growth strategies, and the international monetary system, and the economic models that should underpin thinking about critical policy choices. Among the new realities they consider are the swing of the pendulum toward regulation; the need for new theoretical approaches, incorporating advances in agency theory, behavioral economics, and understanding of credit markets and finance based on theories of imperfect information; and the importance for macroeconomic policy to target not just inflation but also output and financial stability.

Olivier J. Blanchard is Economic Counselor and Director of the Research Department at the International Monetary Fund. He is the author of Macroeconomics, among other books, and coauthor of Lectures on Macroeconomics (MIT Press).

David Romer is Herman Royer Professor of Political Economy at the University of California, Berkeley, and author of Advanced Macroeconomics.

A. Michael Spence, co-recipient of the 2001 Nobel Prize in Economics, is Professor Emeritus of Management at Stanford University’s Graduate School of Business and Professor of Economics at New York University’s Stern School of Business. He served as Chairman of the Commission on Growth and Development from 2006 to 2010 (the life of the commission). He is the author of The Next Convergence: The Future of Economic Growth in a Multispeed World.

Joseph E. Stiglitz, co-recipient of the 2001 Nobel Prize in Economics, is University Professor at Columbia University. He served as Chairman of the U.S. Council of Economic Advisors in the Clinton administration, and from 1997 to 2000 as World Bank Chief Economist and Senior Vice President in Development Economics. He is the author of Freefall: Free Markets and the Sinking of the World Economy, Globalization and Its Discontents, and other books.