Just before the start of the recent G20 summit in Los Cabos, Mexico, economists at the Brookings Institution announced that policy paralysis was hitting the global recovery. This news, while true, is far from shocking. The markets have been complaining for years now that both the U.S. and the European Union have been making minor adjustments rather than enacting real reform and the most far-sighted economists were saying two years ago that the best policy response to the crisis was to stimulate growth in the short term so that debt could at least be serviced, but the priority has gone to austerity, growth has stalled and investors aren’t investing because of policy uncertainty.
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