The world’s leading economic policymakers are “on the right track” to ensure a global financial upturn, the chief of the International Monetary Fund told a Stanford audience on Tuesday.

But she warned the recovery will be derailed without the creation of more jobs, better education systems and a way to shrink the gap between rich and poor. And she cautioned against the potential pitfalls of untested exchanges and digital currencies such as Bitcoin.

“We are on the right track, but we need to ask – the right track to where? And the right track to what growth?” said Christine Lagarde, the IMF’s managing director. “Will it be solid, sustainable, and balanced – or will it be fragile, erratic, and unbalanced? To answer this question, we need to look at the patterns of economic activity in the years ahead, and especially the role of technology and innovation in driving us forward.”

Lagarde’s visit to Stanford was co-sponsored by the Freeman Spogli Institute for International Studies and the Stanford Institute for Economic Policy Research. In addition to delivering public remarks at FSI’s Bechtel Conference Center, Lagarde met privately with faculty and students during the day.

Just returning from the G-20 summit in Sydney, Lagarde said she is optimistic that the world’s economic leaders are committed to taking the steps that will guard against another large-scale financial collapse. She said the G-20 members agreed to complete a set of financial reforms by the end of this year, a move that will make the “financial sector safer and less likely to cause crisis.”

She said the member countries and their central banks have also agreed to better cooperate and be more transparent in their policymaking.

But she’s worried that unless more sustainable jobs are created, economic disparities will increase. And that, she said, will “harm the pace and sustainability of growth over the long term.”

As technology has helped create a more interconnected world, it is playing an increasing role in the economic landscape. Machines have made our lives easier. Artificial intelligence has led to cars that can drive themselves, robots that can do things in place of humans and smartphones that are more powerful than the first supercomputers.

But so far, there’s been no measure of how new technology has increased productivity.

“We certainly need to keep an eye on this,” she said. “One of the biggest worries is how this technological innovation affects jobs. Put simply: will machines leave workers behind?”

She said technology creates “huge rewards for the extraordinary visionaries at the top, and huge anxieties for workers at the bottom.”

Lagarde said it is up to educators to better prepare the next generation of workers.

“Educational systems are not keeping pace with changing technology and the ever-evolving world of work,” she said. “We need to change what people learn, how people learn, when people learn, and even why people learn. We must go beyond the traditional model of students sitting in classrooms, following instructions and memorizing material. Computers can do that.”

Instead, humans must “outclass computers” in cognitive, interpersonal and sophisticated coding skills, she said.

“Think of creative jobs, caring jobs, jobs that entail great craftsmanship – imagination,” she said. “And given the rate and pace of change, we will need the ability to constantly adapt and change through lifelong learning.”

She called on institutions such as Stanford to play a key role in the process.

“Stanford’s model of education was innovative from the very first day—co-educational, non-denominational, and always practical, focusing on the formation of cultured and useful citizens,” she said. “Stanford was ahead of its time back then. I know that it will continue to be ahead of its time as we venture into the exciting period ahead.”

But that exciting period carries with it uncertainty and risk.

Asked about the role that emerging digital currencies such as Bitcoin could have on the evolving economy, Lagarde was skeptical, calling it a “shaky and wobbly” system.

The currency’s trading website went offline this week, spooking investors and calling into question Bitcoin’s future.

“It’s a glamorous, sexy attractive new system,” she said. “But a monetary system is a public good. It has to be supervised and sufficiently regulated so it is accountable. At this point in time, I think Bitcoin is outside that perimeter of both supervision and regulation.”

Lagarde is the 11th managing director of the IMF, and the first woman to lead the 188-country organization. Since she took over the organization in 2011, she has played a role in the world’s most pressing financial matters, working on solutions to a sluggish global economy and the debt crises in Europe.

The IMF gives both policy advice and financing to countries in difficult economic situations. It also helps developing countries reduce poverty and become more economically stable. 

The organization is now poised to assist Ukraine, which is at risk of running out of money to pay its bills in the midst of a political crisis. The country is struggling to cobble together a temporary government in the wake of President Viktor Yanukovych leaving Kiev and being removed from power.

But until a provisional government is formed, the country cannot technically ask for help. When it does, Lagarde said the IMF will send “technical assistance.”

“We are ready to engage,” she said.

On February 10, 2014, Pascal Lamy, the former Director-General of the World Trade Organization, visited Stanford University as a special guest of The Europe Center and the Freeman Spogli Institute for International Studies.

During his two-term tenure at the helm of the WTO (from 2005 to 2013), Mr. Lamy successfully guided the organization through complex changes in the regulation of international trade. Among his many achievements, he oversaw the systematic integration of developing countries into positions of political leadership in the world economic order.

Prior to the WTO, Mr. Lamy served as the European Commissioner for Trade, the CEO of the French bank Crédit Lyonnais, and in the French civil service. 

Mr. Lamy has been decorated with medals of honor from countries ranging from France to Mexico, and has received honorary degrees from eight universities around the world. He has authored several books, including recently, The Geneva Consensus: Making Trade Work for All.

In his farewell statement as the Director-General, Mr. Lamy said in July 2013: “Together, we have strengthened the WTO as the global trade body, as a major pillar of global economic governance. Despite the heavy headwinds and the turmoil in the global economy as well as on the geo-political scene, together we have made this organization larger and stronger.”

Mr. Lamy drew on these experiences to offer insights related to the designing of global governance during his visit to Stanford.

He first participated in a lunchtime question and answer roundtable with undergraduate students. Stephen Stedman, Deputy Director of the Center for Democracy, Development, and the Rule of Law, moderated the event. Among other topics, Mr. Lamy spoke about the necessary mix of economic, social, and political policies that determine the efficacy of free trade as an engine of global economic growth. 

Mr. Lamy then delivered a public lecture, titled “World Trade and Global Governance,” before an audience of over a hundred members of the Stanford community.

In this talk, Mr. Lamy outlined a statement of his own thinking about the future of global governance and international trade, and described what remains to be done in addressing the challenges of globalization. Additionally, he reflected on the features of modern politics that create governance gridlock and thwart global oversight, and identified how progress can be made in overcoming impediments to policy action at the international level.

Mr. Lamy’s lecture focused on three overarching points. First, notwithstanding some setbacks, governments and international organizations have achieved major successes in regulating the liberalization of global trade. Tariffs are on average lower than ever before, and governments did not raise tariffs during the recent financial crisis as they did during the Great Depression.

The WTO has played a central role in facilitating regulatory convergence in international trade. Institutional features such as the organization’s dispute resolution mechanisms have deterred nations from enacting unilateral forms of protectionism. Additionally, by “naming and shaming” nations that raise tariffs during economic crises, the WTO has prevented reversals to autarky in the global economy.

These policies have had a salutary effect because free trade and open markets enhance economic competitiveness, generate growth, and raise welfare standards around the world.

Second, despite these successes in the governance of international trade, challenges remain. A new feature of the global economy is that protectionism based on economic objectives has been replaced by “precautionism” based on normative prerogatives. For example, competing national perspectives on product standards such as those related to safety or labor norms thwart efforts to achieve consensus on trade regulation.

Genetically modified foods represent one example of globally traded products that are held to different normative standards by different countries. Disputes over regulating the global production and distribution of these products are therefore less likely to be resolved by traditional negotiation mechanisms.

Third, in order to overcome this governance gridlock and achieve regulatory convergence, we need to bring together stakeholders from the public and private sector to build coalitions that jointly negotiate conflicts in matters of global governance.

For example, the “C20-C30-C40 Coalition of the Working” that comprises the 20 largest countries, the 30 largest companies, and the 40 largest cities in the world is currently striving to overcome regulatory gridlock on climate change. This coalition can define carbon emissions targets, supervise urban infrastructure projects, and evaluate progress on energy and environmental objectives.

Mr. Lamy reiterated that trade can only serve as an engine for economic development if governments and international institutions enact economic and social policies that reflect the preferences of a broad swath of global stakeholders. Only by adapting the governance structures of the twentieth century to respond to the challenges of the twenty-first century, can we overcome new forms of policy gridlock at the international level.