For instance, in Portugal the credit boom that began 1995, as entry into the euro seemed more and more assured, implied that the private sector balance fell from +5% of GDP in 1995 to –5.2% in the year 2000. That is a 10 p.p. variation in 5 years. As the public deficit improved on by 1.7 p.p.
In 2008, when the world got into a crisis, there was a lot of policy force. In the years before the crisis, the world enjoyed the so called “Great Moderation” with steady growth in advanced economies and accelerated growth in the emerging economies, and low inflation all around. So we could attack the crisis with the full fire power of monetary and fiscal stimulus.