4 Immediate dangers have subsided, though we are still facing a possibly bumpy adjustment process after the collapse of the “credit bubble”. In order to look ahead, the following two points should be kept in mind. First, these catastrophe-insurance measures are in fact “free” insurance. Beneficiaries of these measures do not pay fair, or, in many cases, any premium for these hedges.
Growth in external funding has only a weak relationship to investment. Debt funding appears to be linked to mergers and acquisitions activity, which has remained relatively modest compared with levels prior to the financial crisis. The second issue I want to discuss is the experience of entrepreneurs seeking to start or expand a small business.