This often calls for judgement beyond any econometric forecast as the second round effects can be very uncertain. It is also virtually impossible to judge with any accuracy whether an exogenous shock like the oil price increase is transitory or whether it will continue for a prolonged period of time.
In a few EDEs with poor infrastructure facilities, scaling up infrastructure investment provides one such avenue, just as reconstruction in Japan and Thailand is expected to ignite reacceleration of output. 19. Questions, nevertheless, remain about how smooth and durable the transition from export-oriented growth to domestic demand will be, especially in economies where household debt is relatively high.