A coincident deceleration in activity among the world economies was evident over the past year, owing, at least in part, to the retrenchment in the high-technology sector and the global reach of the capital markets in which the firms in that sector are valued and funded. However, before the terrorist attacks, it was far from obvious that this concurrent weakness was becoming self-reinforcing.
The reasons for these remarkable trends, including the extent to which they reflect the effects of the exceptional monetary policies being conducted by the major jurisdictions, or other things, could be debated at length. What is clear though is that a combination of forces has resulted in financial conditions remaining remarkably accommodative.