A creeping ascent

THE world economy continued to recover from the financial crisis in 2013, albeit wanly. Stockmarkets around the world rallied (chart 1).

And companies are issuing what is likely to be a record amount of debt (chart 2), to take advantage of rock-bottom interest rates.

The fear of further debt crises in the rich world receded as growth picked up and budget deficits declined (chart 3).

But most developed economies remain little bigger, if at all, than they were before the crisis struck; the contrast with many developing countries, notably China, is stark (chart 4).

The share of working-age adults in employment remains below its peak in most of the rich world (chart 5).

Banks face growing penalties for misconduct during the crisis from emboldened regulators (chart 6).

They are also hampered by more elaborate regulation and stricter capital requirements; in many cases, they are responding by curbing credit (chart 7).

Moreover, even this lacklustre performance is underpinned by central banks’ extremely loose monetary policy. The Federal Reserve and the Bank of Japan have continued to print money on a huge scale to purchase bonds, in the hope of driving down long-term interest rates, while keeping short-term ones close to zero (chart 8).

When the Fed suggested in May that it might soon start scaling back its asset purchases, the mere prospect caused a rout in emerging-market currencies (chart 9), as investors withdrew their money in search of higher yields in advanced economies.