The G20 and the world economy

Despite unprecedented stimulus, the biggest risk is still that governments overall do too littleRARELY has a gathering of the worlds most important politicians been surrounded by so much hype. The leaders of the G20 group of rich and emerging economieswho were meeting in London on April 2nd as The Economist went to presscame with lofty aspirations to rewrite the rules of global finance and reshape the worlds financial institutions. The summit marked Barack Obamas international debut and, for added tension, was accompanied by loud and colourful anti-capitalist protests (see article). But, for all the political drama, the posturing, the preening and the outsize ambitions, history will judge the G20 leaders by a cruder criterion. Are these people, who between them run around 90% of the world economy, doing what it takes to combat the worst global recession in 80 years?It is hard to overstate what is at stake. Since the G20 leaders had their inaugural gathering in Washington, DC, last November, the global economy has fallen off a cliff. Consumers have cut back their spending. Companies have slashed production, postponed investment and laid off workers in their millions. The financial system remains dysfunctional. Trade flows are shrinking at the fastest rates since the second world war, felling export-dependent economies from Germany to Japan (see article). Private capital flows are collapsing, devastating those emerging economies, especially in eastern Europe, that rely on foreign borrowing. ...