It is unclear, however, whether the weekend meeting of finance ministers and central bankers from the Group of Seven industrial nations in Tokyo took either much further. These were two important topics for discussion, but they were not the only ones. As expected, there were complex manoeuvrings over what to say, and not to say, about exchange rates. The main challenge highlighted in the G7 statement is securing a more balanced pattern of world growth. It is particularly important, argues the communiqu , for countries to take advantage of investment opportunities created by information technology.
Structural reform is required to improve investment opportunities and create jobs.
But while serving as an example of remarkable economic performance, the US economy also poses some of the largest risks to stability in the international economy. The current account deficit, forecast by the OECD to exceed 4 per cent of gross domestic product this year, in part reflects the weaknesses of economies elsewhere. But it also reflects the danger of overheating in the US economy. Domestic demand, buoyed by a highly valued stock market, continues to outstrip the growth of domestic supply. The current account provides a helpful safety valve.