Why the global economy may need to get worse before it gets better

Until governments act collectively to bolster growth, lasting recovery from the 2008-09 recession will remain elusive

A wind of change is howling through the world's economic institutions. Last week it was the International Monetary Fund saying that austerity could do more harm than good and that neoliberalism was not all it was cracked up to be. This week it is the turn of the Organisation for Economic Cooperation and Development to challenge the orthodoxy.

The OECD says governments around the world should consider banding together to spend more on public works, something it deems necessary because lasting recovery from the deep recession of 2008-09 remains elusive.