The right choices for 2015

As 2014 draws to a close, policymakers around the world are faced with three fundamental choices: to strive for economic growth or accept stagnation; to work to improve stability or risk succumbing to fragility; and to cooperate or go it alone. The stakes could not be higher; 2015 promises to be a make-or-break year for the global community.

For starters, growth and jobs are needed to support prosperity and social cohesion in the wake of the Great Recession that began in 2008. Global growth is projected at just 3.3 percent in 2014 and 3.8percent in 2015. Some important economies are still fighting deflation. More than 200 million people are unemployed. The global economy risks getting stuck in a "new mediocre" - a prolonged period of slow growth and feeble job creation.

To break free from stagnation, we need renewed policy momentum. If the measures agreed by the leaders who assembled at the G20 Summit in November are implemented, they will lift the world's GDP by more than 2 percent by 2018 - the equivalent of adding $2 trillion in global income. Furthermore, by 2025, if the laudable - yet not overly ambitious - goal of closing the gender gap by 25 percent is achieved, 100 million women could have jobs that they didn't have before. Global leaders have asked the International Monetary Fund to monitor the implementation of these growth strategies. We will do so, country by country, reform by reform.

Besides structural reforms, building new momentum will require pulling all possible levers that can support global demand. Accommodative monetary policy will remain essential for as long as growth remains anemic - though we must pay careful attention to potential spillovers. Fiscal policy should be focused on promoting growth and creating jobs, while maintaining medium-term credibility. And labor-market policies should continue to emphasize training, affordable childcare, and workplace flexibility.

As we ponder the second choice, between stability and fragility, we must consider how we can make our increasingly interconnected world a safer place. Financial integration has risen tenfold since World War II. National economies are so interconnected that shifts in market sentiment tend to cascade globally. It is therefore critical that we complete the agenda on financial-sector reform.

There has been progress, especially on banking regulation and on addressing too-big-to-fail financial institutions. But countries must now implement the reforms and improve the quality of supervision. We also need better rules for nonbanks, stricter monitoring of shadow banks, and improved safeguards and more transparency in the derivatives markets. Progress on closing data gaps in the financial sector is urgently needed as well, so that regulators can properly assess risks to financial stability.