ABSTRACT
This Mundell–Fleming lecture reviews some of the main developments in international macroeconomics since the early 2000s. It highlights four important areas of progress: (a) on international pricing and invoicing;(b) on sectoral trade and production networks;(c) on the cross-border allocation of capital and the role of global financial intermediaries;(d) on cross-border externalities and prudential policies. It then explores three specific questions, relevant for future research and policy: (a) the implementation of optimal prudential policy via ‘basis control;’ (b) recent developments about the US external balance sheet and its ‘exorbitant privilege;’ and (c) the reform of the International Financial and Monetary System. © 2022, International Monetary Fund.