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Synopsis Global economy is at crossroads. There is no single or simple answer to current economic problems. Transparency in the conduct of monetary and fiscal policies is needed to provide an anchor for expectations. Developments that seem unusual, even unbalanced, need to necessarily be judged unsustainable. For example, the potential gains offered by new technology, particularly in the production of goods and financial services, may provide the sound rationale for a number of trends that currently seem hard to explain. Yet a starting point characterized by significant macroeconomic imbalances and major financial restructuring does not present a comforting environment for policy makers; given very low interest rates and virtual price stability in many countries, the scope for lowering real policy rates is now limited. This environment also implies a continuing need to focus on measures to strengthen the global financial system which looks to be the most vulnerable part of market-based economies.