The world economy is in the midst of the second slowdown of this recovery from the financial crisis of 2008 and 2009. The question is not whether we have the economic or financial capacity to act to strengthen growth, but whether we have the political ability to do the right things.

The shocks behind the slowdown – oil prices, Japan’s disaster, the crisis in Europe – are severe enough to have been dangerous even if they had happened during a global boom. They are more dangerous now because they hit a world still healing from financial crisis and because of the general fear that political constraints will prevent governments and central banks from acting sensibly with the tools available.

With interest rates very low in the major economies, budget deficits swollen by the crisis, and the financial imbalances of the crisis only partly resolved, there are limits on what policy can do to help strengthen growth.