Emmanuel Farhi. While the US dollar remains the main global reserve currency, growing global demand for safe assets and historically low interest rates may lead to the reemergence of a “Triffin dilemma.” New currencies will likely compete for reserve currency status, which could bring significant benefits, but the path is likely to be disorderly. Farhi noted that there is scope for modernizing the role of the IMF, possibly by administering a new global reserve facility, acting as a central counterparty clearing platform for bilateral swap lines, or by offering its own short-term swap facility.

Ricardo Reis. The distinction between bilateral swap lines and IMF loans is becoming less clear and the IMF could act as an intermediary between the US Federal Reserve and central banks. The IMF could take on the risk exposure and set interest margins based on countries’ exchange rate risks. Reis also highlighted the IMF’s unique position to offer stress testing and asset quality reviews to its members.

Keyu Jin. As China continues to integrate in the global economy, it will anchor global demand, provide liquidity in times of crisis, become a source of diversification for global portfolios, with the RMB potentially gaining reserve currency status. However, a more open China may also imply increased global volatility. Therefore, the pace of liberalization needs to be carefully considered. The IMF could play an important role in enhancing cooperation and could act as an intermediator to avoid confrontations among countries.

Melissa Dell. There are long-lasting transitional costs from job disruption caused by trade and technological developments. For example, violence and drug trafficking have increased in Mexico as jobs were lost due to competition from China. Mounting evidence shows that these effects can last up to 30 years. Dell underscored the need to consider the distributional consequences and interlinkages of policies.