It is also uncertain whether China, which has risen as one of the G2 along with the U.S., will be able to continue its stable growth. The QE policies conducted by the U.S., Japan and other advanced economy central banks to overcome the crisis were so unprecedented that it is difficult to predict the channels, the extents and the intensities of their impacts.
In other words, the central bank, responding to a variety of political pressures and weaknesses, may stray away from even the constrained optimal – towards third best policies rather than second best policies. Second, cross-border capital flows can lead to a more dramatic transmission of policies, driven by agency (and other) considerations that do not necessarily relate to economic conditions in the recipient countries.