The decline of the dollar, the Mexican crisis, and sluggish global
growth reveal the failure of the Group of Seven industrial nations
to provide effective management of the world economy. The G-7 once
played this crucial role effectively, and must do so again if
future crises are to be averted and global prosperity to be
promoted. This study assesses the G-7's record and the reasons for
its demise. It outlines an action program that includes reforming
the exchange rate regime, creating a new financial facility at the
IMF to deal with crises sparked by private capital flows, and
instituting an early warning system to prevent serious new
disruptions in the world economy
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