The global economy is at an inflection point: it can muddle along with sub-par growth – a “new mediocre”; or it can aim for a better path where bold policies would accelerate growth, increase employment, and achieve a “new momentum”.

How can this second “m” – momentum – be generated?

For one thing, we need better balance in our policy toolkit – using both the demand and supply side of the economy. Think of the famous Georgetown Hoyas basketball team – you need all players to work together to win. You need teamwork. The same is true for the global economy. Each policy instrument must play its part in order to achieve proper balance.

Monetary policy has provided important support to demand during this crisis. In the U.S., for example, the Federal Reserve’s quantitative easing has done much to aid recovery.

But monetary policy cannot suffice. Moreover, the longer easy money policies continue, the greater the risk of fuelling financial excess. This needs to be monitored and managed.

Equally important, as I mentioned earlier, where the prospect of exit from monetary easing looms – as in the U.S. – the implications for other parts of the world need to be monitored and managed. A continued gradual approach with clear communication from the Fed is key.

So too is the adoption of appropriate macro-prudential policies by those countries that stand to be most affected by monetary normalization – especially emerging markets. What does “macro-prudential” mean? It means measures that can help prevent financial excesses and protect the stability of the financial system, such as minimum liquidity ratios.

So back to the Hoyas: monetary policy is playing its part. Now it needs more support from the rest of the team – other policies. There are three important and interrelated elements here – and all can help promote a higher level of growth and jobs: fiscal policies; structural reforms of labor and product markets; and public investment in infrastructure.

Let me touch on each of these.

(i) First, growth-friendly and job-friendly fiscal policies.

A great deal has been achieved in many countries in recent years to reduce excessive deficit and bring debt under control. These gains must not be squandered. And yet, there are still a few levers that fiscal policy can pull to boost growth and jobs:

The pace of consolidation and composition of fiscal measures should support economic activity to the extent possible. Of course, specific timing and scope for flexibility must be attuned to country circumstances. That is why the IMF has given this issue priority in the programs that we support – from Africa to the Euro Area. A sensible pace.

Well-targeted fiscal measures can contribute too, such as reforms that can address tax evasion, support more efficient public spending, and reduce the burden on labor – lower payroll taxes, for instance. A sensible mix.

The reform of energy subsidies, which we estimate at about US$2 trillion, can also generate revenue. As it stands, these subsidies mostly benefit the relatively affluent, not the poor. They also harm the environment.

So growth-friendly, job-friendly, environment-friendly fiscal policies can help. But they cannot substitute for policies to remove deep-seated distortions in labor and product markets.

(ii) That brings me to the “structural reforms” that are so essential to raise productivity, competitiveness and employment.

What should be done? First of all, the scale of the challenge should not be underestimated. Today, more than 200 million people around the world are still unemployed, of which 75 million are youth. In addition, with the exception of the top 1 percent, most people have seen their incomes stagnate or shrink over the past few years.

To lift consumption and investment, we need more robust job and wage growth. In particular, we need to make labor markets stronger. How?

Through well-designed, active labor market policies and training programs that bolster the demand for workers – especially young people. There are some useful examples in countries like Australia, Germany, and Sweden; and

Through policies that increase labor participation, especially of women. In Japan, for example, a major effort is ongoing to expand the supply of day-care centers to encourage women to join the labor force – and as a way to offset aging pressures. Similar policies are explored in Korea.

Opening up of product and service markets can also reinforce the gains from labor market reforms – one example being the many professions, from lawyers to taxi drivers, which are closed to competition in many countries.

Even then, these policies would only go so far unless we improve the flow of credit to the economy. We need insolvency regimes that can help banks and the private sector effectively deal with their debt burdens – to free up their balance sheets so credit can flow back and grease the wheels of the economy.

Again, no one size fits all here. Policies must be designed according to country circumstances. But whatever the country-specific measures might be, all nations need to place a much higher premium on structural reform – and on investment.

(iii) Public investment in infrastructure is especially important. Why?

The crisis has inflicted a heavy toll on both growth and investment, which remain well below their long-term trends. As of last year, we have estimated that for the G-20 countries, GDP is 8 percent lower than it could otherwise have been. The shortfall in investment is even higher – nearly 20 percent below trend.

In advanced economies, capital stocks – airports, electricity, internet grids – were depleted as public investment was steadily scaled back by a quarter – from about 4 percent of GDP in the 1980s to 3 percent today. Is it any surprise that aging infrastructure is now such a major concern?

Right here in Washington DC, the American Society of Civil Engineers estimates that 99 percent of the major roads are in poor condition. Globally, some estimates place spending on infrastructure at US$6 trillion over the next 15 years. This is an obvious imperative in many countries, where bottlenecks and obstacles to transportation and energy supply abound and hamper development.

Again, the scope for investment differs across countries – depending on infrastructure gaps and fiscal space. And for all countries, ensuring efficient infrastructure spending is crucial. There is no question, however, that it can be a powerful impetus for growth and jobs.

One more point: recent estimates – by the Global Commission on the Economy and Climate – indicate that integrating lower emission standards into infrastructure investment would cost only a tiny fraction (about 4.5 percent) of total projected spending. So efficient investment – especially at a time of historically low interest rates – can be good for growth, good for jobs, and good for the environment.

Concluding remarks on the new multilateralism and role of the Fund

We have talked about “mediocre” growth and the policy “momentum” needed to overcome it. I would like to conclude with my third “M” – multilateralism.

We have seen some concrete examples of global economic cooperation in action during this crisis.

Perhaps most prominent has been the G20 nations coming together – including to provide additional resources to the IMF – to bolster confidence and safeguard the global financial system. Just a few weeks ago, the G20 announced further progress in developing strategies to lift medium-term growth by a collective 2 percent of GDP by 2018 – holding the promise of more growth and jobs.

The IMF, of course, has been a forum for cooperation throughout its 70-year history. This has continued during this crisis.

We have revamped our lending toolkit, including by making our instruments more flexible in providing liquidity on a precautionary basis and easier to access in emergencies. And we introduced zero-interest loans for our low-income members. We have also significantly increased our financial assistance across the globe – close to US$700 billion in commitments over the last 6 years.

We have done some new analysis and thinking on a range of critical issues: on capital flow management and capital controls; and on the growing interconnectedness of the global economy and the spillover effects of one country’s policies on others. We have pushed the envelope on the negative effects of excessive inequality on growth; the fiscal implications of climate change; and – something very close to my own heart – the role of women in the work force and their powerful potential to boost growth and incomes.

It might surprise you to learn that the largest service that the IMF now provides is capacity building and technical assistance. Almost 90 percent of our 188 members have benefited– from Mauritius to Myanmar to Mexico. We have also initiated a massive open online course – a “MOOC” – with almost 2000 graduates from all over the world, in the last year.

To be effective in the 21st century, of course, we need to be adequately resourced and adequately reflect the dynamic nature of our global membership. To that end, the vast majority of our members have approved an IMF governance measure: the 2010 Quota reform. We now await approval by our largest shareholder–the United States–which we hope will happen soon.

Seventy years on, we continue to adapt to fulfill our raison d’être – to safeguard stability by helping countries through economic fallouts, and forging cooperative solutions to global problems. For you and for generations to come.

As I like to say sometimes: “This is not your father’s IMF”. Actually, it is yours!

Together, as we look forward to the future, perhaps those wonderful Georgetown colors can help guide us: there are some “grey” clouds, but – aiming higher, trying harder, doing it together – we can gain new momentum and bring the “blue” skies.

Thank you.