The Great Recession never arrived, says last week’s The Economist. But there’s a catch. See “The Great Stabilisation“. Excerpts:
Today’s stability, however welcome, is worryingly fragile, both because global demand is still dependent on government support and because public largesse has papered over old problems while creating new sources of volatility.
Apparent signs of success, such as American megabanks repaying public capital early), make it easy to forget that the recovery still depends on government support. Strip out the temporary effects of firms’ restocking, and much of the rebound in global demand is thanks to the public purse, from the officially induced investment surge in China to stimulus-prompted spending in America.