So that is pretty evenly split, actually. Theres certainly quite a lot of recognition that Central Banks need to think about new toolkits. We are going to go to some questions now, but if you want. O use the platform to submit i think larry gave an excellent description of what the core problem is that the developed world faces, that there is a glut of saving and a , and it of investment really means that we have to have fiscal policy, structural policy, and things other than. Ust relying on Central Banks i think Central Banks need to do what can come about they can. Adopting a system called flexible average inflation targeting, i think this is an appropriate change. Somewhat improve the scope of Monetary Policy to show that shortterm Interest Rates are often constrained by the effect of lower bound. I think it is helpful in preventing a cycle of falling inflation feeding falling inflation expectations, but i strongly believe Central Banks need to be independent and need to do everything they can. The changes they have made, they are not a game changer from the point of view of secular stagnation, and bottom line, i agree with larry on what is required. Theres a lot about the importance of fiscal policy at this moment. I have to ask you, would you like to be more closely involved in that as a treasury secretary for the new administration . I dont have anything for you on that, im sorry. [laughter] do you think you would be a good treasury secretary . I could probably ask the rest of the panel that. That is for other people to decide, i think. Be a great treasury secretary. But let me talk about another issue which is related to larrys secular stagnation idea. In some sense, the hope for the world was that fastgrowing emerging markets in developing countries would provide that demand, which seems lacking at the aggregate level. One of the big concerns we should have with this pandemic is how much scarring has gone on in those economies because they havent had the ability to provide the kind of fiscal, as well as credit support, that industrial countries have. My worry is apart from the north asian economies which seem to have come out quite well from this crisis, many countries in latin america, africa, south asia are going to suffer some diminishing Growth Potential going forward, coupled with some of the impediments we see. I think this is a cause for concern for the Global Economy. It is something that we should work very hard on over the next few years to try and reverse, and that is where larrys call is of hugeleadership importance. Thatd where should leadership come from, if we dont think that Central Banks should be solving all of these problems alone . Right now it seems there is likely to be change in washington. Historically it has been the United States which has been the leadership. Whoas gordon brown essentially corralled the g20 into doing some important actions larry talked about, but we need somebody to actually take leadership now and corral countries into doing more, giving direction to the imf and the world bank, as well as perhaps getting some centralbank action into this, if necessary. World central bankers should be calling for urgent action in the communiques of the financial g20, which ultimately should leaders g20. The world needs the kind of g20 meeting that took place in london three months into president obamas term to set a strong global response. This doesnt involve any significant burden on taxpayers in the United States or other industrial countries. Fdrs more aggressive Financial Engineering from the world bank. The imf has twice as much gold by value as it did a decade ago because of the appreciation in the price of gold. Theres no reason why it cant be back to help support doing more for the poorest countries. The private sector has not inaged in any serious way debt restructuring for emerging markets. We all talk about cooperating with china on the most important global issues. There needs to be cooperation with china on the whole set of issues around support for emerging markets. Explainal banks could not that they could do it, but ultimately the Financial Stability of all the institutions they are responsible for, the Financial Stability of their economies depends much more urgently on achieving successful Global Cooperation then it does on anything else. If they could make that case, they would be making a much greater contribution to the current global moment than they currently are. Is much more difficult than that. In 2010, the issue was to bring countries together and allow them to do what we all wanted to do individually anyway, which was to ease policy, and to deal with the rather narrow problem in the collapse of the Banking Sector. The issue we have now is much broader than that. The problems of emerging market economies or low income economies are one thing, where Global Cooperation could help. Dealing with the underlying Strategic Issues is something rather different. And the problem is not the mandate of Central Banks. It is not the toolkit of Central Banks. It is understanding the forces that are leading the economy to grow very slowly. Understanding what is going on is far more important at present than the mandate of a policy framework. That i think is what needs to change, and it isnt just expansionary fiscal policy because Interest Rates are close to zero. It is much wider than that to deal with this problem of excess saving in the world as a whole, lower saving rates in some countries, higher saving rates and others. Go ahead. I was just going to say, i but i thinkervyn, the world looks to the central Banking Community to explain the nature of the macroeconomic challenges before it, even if the Central Banks themselves lack the tools to deal with it. If the central Banking Community can explain as janet just did, as i tried to a little bit and talking about the absorption of savings problems, if that problem can be laid out clearly, that is the first step. It doesnt solve it to lay it out clearly, but is a crucial step toward a whole range of measures, and your absolute right that it involves a million Different Things that are necessary to resolve it. But first we need to find that problem, and that is something Central Banks can surely do. I totally agree, and i think the destruction that moving to other policy issues is taking centrals away from what they should be doing is explaining the Central Global challenge. We can have this conversation all afternoon. I would really enjoy it. It has been a fantastic conversation. But we must move to the next session now. So thank you very much. Alix youve been listening to a panel with former fed chair janet yellen, as well as mervyn king and larry summers. Really interesting conversation at the Bloomberg Economy for them. You can continue to watch on neweconomyom and forum. Com. All of this taking place with rising virus counts, the questions of whether we will see this cool stimulus from the u. S. And when, and recovery questions and europe as well, and emerging really leading the way. Paulson hank paulson is also speaking right now. Lets listen to what he has to say. I am delighted to join this for a minutes third year, and i am pleased to see how it has grown and thrived. It is worth recalling that when we gathered for our first the outlines of our stormy present were already apparent. I remarked that we had arrived at a moment of change, challenge, and potentially even crisis. I warned that the prospect of a crisis between the United States and china was leading to the risk of an economic iron curtain. Fastforward two years. It gives me no joy to report that those warnings have been borne out. The u. S. China relationship has become more fraught. We have seen more tariffs, thehtened restrictions in flow of technology, disruption of supply chains, more restrictions on investment, and fewer capital flows in fewer sectors. Exchanges, fewer students and scholars are heading in either direction. Journalists have been expelled, consulates have been closed, proposed acquisitions and investments have been denied. Political rhetoric has become more inflammatory. It has given us a taste of how debilitating strategic turbulence can be. The pandemic has made the situation worse. Need to workchina jointly and with others to end this crisis, and soon. President elect joe biden has a generational opportunity to plot a course for america that allows us to compete and to thrive. I have known joe biden for many years. He is a unifier and a patriot. Administration is about to change, but the clock will not simply be rewound. Wastrump administration responding to real concerns of American People about china, and real failures of china to act as a responsible global citizen. The question is how we respond to these legitimate issues. One perverts benefit of the tensions that have characterized the last few years one perverse benefit of the egyptians that have characterized benefit of the tensions that have characterized the last few years, even those who did not agree with every policy choice in washington or beijing have come to understand that while new leaders can bring new policies, competition between big powers, especially between two big powers with rival ideologies, very different political systems, is mostly structural. Competition is now baked into this relationship. A competitive approach to china was inevitable. But keeping it healthy and not pernicious is vitally important, and that wont be easy. To compete effectively, president elect biden will need to get the dimensions of competition with china right. So what does that mean . For many americans, the goal of china policy has come to be one thing, achieving reciprocity. For most people, that means we will do with china only what china does with us. We will punish china when china harms us. The Ongoing Administration made this idea of reciprocity the very foundation of a strategy to work china. The strategy declared that the u. S. Would welcome economic relationships rooted in reciprocity, and playing that america would shun any and all american relationships that lack it. This vision was welcomed by many at home, and even some allies. At one level, this is unsurprising. It speaks to an american fundamental sense of fair play. It is simply unreasonable for beijing to expect the rest of the world to keep its markets open to china unless china continues to open its markets to the world. I have long made this argument myself, but this cannot be the end of the story. Here is the big challenge. America has an open economy, which is our greatest competitive strength. Contrast, has an economy that is closed in many areas. But whenever an open economy mirrors the action of a closed economy, the open when in evitable he starts to close itself off open one inevitably starts to close itself off. If achieving reciprocity makes the american system more like chinas, america will ultimately be the loser. We cant remain competitive if we become more like china with its closed status model, which i believe isnt going to stand the test of time. So it is time to adapt our principal desire for reciprocity to the evolving and realworld needs of american workers, farmers, ranchers, and businesses both small and big. It is time to move from reflexive reciprocity that responds fiercely and that ially to a policy call targeted reciprocity. We need reciprocity targeted to changing needs of the american worker. We need reciprocity targeted to keep american businesses competitive. We need reciprocity targeted to ensure that job creating capital continues to flow to the United States. We need reciprocity targeted to ensure that best in Class Companies want to remain headquartered in the United States. We need reciprocity targeted not anything and everything china does. Instead, the u. S. Should aim its demands for reciprocity at sectors and areas where america is the strongest and most competitive. Reciprocitye need targeted so that america doesnt become less american in the bargain. We must shift from reflexive reciprocity to targeted reciprocity that holds chinas feet to the fire without making it harder for americans to thrive. Targeted reciprocity would shift our strategy from reactive to proactive. It would leverage what is best about america without losing sight of what is most competitive about america. But the path to success begins at home, and the first step is to reinvest in the policies and values that have made america thrive. Many people fret that there will be a military crisis between the United States and china, and with good reason. But this is an economic competition, not a military one. Is the foundation of military power. Economic power made america the worlds Growth Engine, and economic power enabled china to become a Growth Engine more recently. So if americans want to compete with china over the longterm, we must reenergize a system that has made our country the in the of the world for generations. We must prove our economic model is better than authoritarian state capitalism. Our success or failure here will be the key to American Global leadership, to what china does. We need to look to the future and design an Economic Recovery Program that bolsters our competitiveness. That means supporting innovation , upgrading our social safety net while maintaining incentives to work, investing strategically in infrastructure, reforming immigration policy, and importantly, addressing our structural fiscal deficit. Targeted reciprocity is the best means to execute this agenda, and that brings us back to china policy. Be First Priority must rebuilding the Global Economy in the wake of covid19 and creating Job Opportunities for americans while reducing economic disparity. The two largest economies as the two largest economies, it is in the interest of americans, chinese, and the world that the u. S. And china find a way to globalbal, growth economic growth. Relentless competition where the two governments seek to curtail all trade, investment, and technology flows between them will make that very difficult. Of course, investments that threaten our National Security should be prohibited, we must be careful to avoid sequestering so Much Technology that American Companies lose their ability to commercialize and deploy their products in the worlds fastestgrowing markets. Companies need to know where the u. S. And china are going to cooperate, where they are going to compete, and where they are adversaries. We need major adjustments to our economic relationship with china , but we must reject the increasingly popular idea that merely having an economic relationship with china is somehow bad. What we need is one that is better suited to americas own interests. Economic linkages that are the rightful source of so much fact,n today do, in benefit us in important ways. Circuit is so here is what targeted reciprocity looks like. President biden is a multilateralist. He understands we should be working with other nations to pressure china for structural economic changes. Biden should coordinate with leading economies to update the global system and its governing bodies like the wto. Global rules for trade, thestment, technology, environment, and the Digital World must be updated. If these allied economies can agree on a framework, they will be in a far stronger position to invite china to join if it is willing to meet their agreed standards. If beijing refuses to join this effort and remains inflexible, we should look to a punitive toolkit dealt on targeted reciprocity that includes jointly withholding access to our markets. Tocourse, that brings us bilateral tariffs which have been key to the trump era. There erratic application has harmed the u. S. As a Global Supplier and a safe harbor for investment. Much of the damage has already been done. The trade deficit with china continues to rise. We should now link tariff removal to a new approach founded on targeted reciprocity. I would only remove existing tariffs when we have extracted a reciprocal and tangible benefit from china, met by defined benchmarks in a phased bilateral trade agreement. The Biden Administration should initiate a company and have new round of bilateral negotiations with china. It should aim for a fair, sweeping, and reciprocal trade relationship based on more meaningful competition. Heres another strategy. Instead of president trumps emphasis and outdated emphasis on outdated, ineffective purchase agreements, we need to open key areas to investment and export. We must tackle the market distortions of chinas stateowned firms, and we will need to deal with structural and process issues that include services, not just goods. The agreement should be done in phases with regular deliverables, beginning with easier issues that build momentum to tackle the tough ones. In return, the u. S. Should be prepared to open its own markets. We also need to be more consistent and predicable. Achieving this will be hard, but key in ensuring a better recovery. Another important component of a refreshed agenda is to forestall environmental catastr