It is hard to be optimistic about America at present. With the help of crucial government support in the crisis, the US financial sector (or at least parts of it) has bounced back, while America’s real economy struggles with high unemployment, discouraged labour-force dropouts, and damaged balance sheets.
[However, a] policy agenda in the US that is overloaded, overwhelmingly domestically focused, and partially paralysed will mean a lack of attention to global issues that require cooperation and compromise, including the international dimensions of financial reform. Absent coordination, there is also a risk that monetary policies designed to promote growth (or at least not impede it) will lead to a return of financial-sector distortions and imbalances. The rebalancing and restoration of global demand in the medium term is discussed within the G-20, but has not really gotten underway.
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