As monetary policy reaches its limits, it's time for governments to spend

With interest rates so low, governments should borrow to invest in research, education, and infrastructure

The world economy is visibly sinking, and the policymakers who are supposed to be its stewards are tying themselves in knots. Or so suggest the results of the G-0 summit held in Shanghai at the end of last month.

The International Monetary Fund, having just downgraded its forecast for global growth, warned the assembled G20 attendees that yet another downgrade was pending. Despite this, all that emerged from the meeting was an anodyne statement about pursuing structural reforms and avoiding beggar-thy-neighbour policies.