The breaking of the real estate price bubble would certainly be no less a blow to investment and consumption than the breaking of a stock market bubble. In addition, owing to the existing problems in the balance sheets of banks and insurance companies in the major industrial countries, considerable stock market uncertainty still exists. 3.
Some countries are finding increasingly less room for making macroeconomic policy adjustments. Since 2000, many developed countries have successively lowered their interest rates and increased their fiscal deficits in response to the worsening domestic and foreign economic situation.