Too much too soon: Policymakers in much of the advanced world face a difficult problem. While their fragile economies need more fiscal stimulus, they must build confidence in medium-term fiscal prudence -- a difficult challenge when running an unprecedented fiscal deficit. If they are prudent too soon there’s risk of a Japan style stagnation; too late and they risk the wrath of the bond vigilantes.
View the July 2010 Investment Briefing by Dr. Susan Gosling (PDF, 262KB)