The combination of low inflation and low interest rates, in particular, should be beneficial. Also, in Japan the recession seems to have bottomed out. A recovery of the world economy from its recession was by no means a foregone conclusion. Nevertheless, the remarkable stabilisation points to strong underlying resilience, fostered by increasingly flexible markets and by timely policy responses.
However, the mild recession has not managed to purge all of the excesses accumulated during the previous expansion. The recovery is currently accompanied by several ongoing adjustment processes, with disequilibria that built up throughout the 1990s still being corrected.