These issues should have been recognised as sources of vulnerability, but the focus was on growth, without enough concern about resilience in the face of variance in growth. This failure to recognise the interaction of elements was a key misunderstanding as the crisis broke.
Broadly speaking, stabilisation helps smooth the business cycle, allocation  2  B. Sørensen and O. Yosha (1996), “Channels of interstate risk sharing: United States (1963-1990)”, The Quarterly Journal of Economics, November, pp. 1081–1111. 3  Y. Demyanyk, C. Ostergaard and B. Sørensen (2008), “Risk sharing and portfolio allocation in EMU”, DG Ecfin Economic Papers 334.