Steering Structural Change : Rethinking Government Policy to Support Fundamental Economic Transformations

How to guide and support societal changes driven by geopolitical turbulence, technological advances like AI, and the green energy transition.

Steering Structural Change explores looming transformations that both advanced and developing economies face as rising geopolitical tensions, accelerating climate change, and advances in technology disrupt economic structures. These seismic factors demand a fundamental reconsideration of economic policies.

Even though there is a general understanding of the policy measures and reforms needed at this juncture, the unequal economic effects and political economy obstacles that they entail can impede their implementation. Technological advances, such as digitalization, automation, and AI, will disrupt labor markets as productivity improvements enhance some occupations but obviate others. The clear aggregate benefits of technological progress will come with large and long-lasting adjustment costs. Uniquely captured in this edited collection, the current debate among experts and economists will help guide the design of effective policies to prepare workers, ease the process of reallocation, and ensure that the collective benefits are broadly shared.

Pierre-Olivier Gourinchas is Economic Counsellor and Director in the Research Department of the International Monetary Fund in Washington, DC.

Maurice Obstfeld is C. Fred Bergsten Senior Fellow at the Peterson Institute for International Economics in Washington, DC.

Petia Topalova is Division Chief of the Development Macroeconomics Division in the Research Department of the International Monetary Fund in Washington, DC.