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##cies and corporate scandals in the usa. gradually, unease increased because of security policy developments. the financial unease gradually infected the real economy ; confidence among companies and consumers began to fall in several countries over the summer and it became increasingly clear that total demand had been negatively affected. this contributed to enabling the riksbank to lower the repo rate twice during the autumn, measures that were in my assessment quite fitting under the circumstances. what we can observe today, compared with one year ago, is that the questions baffling forecasters are roughly the same and that they are dominated by the question of how far the adaptation process following from the stock market bubble has come. today an additional factor making assessments more difficult is the threat of war in the middle east. we do not know whether there will be a war or how it will all end. the crisis also creates uncertainty that makes it difficult to correctly interpret economic signals. in addition, the more prolonged the crisis is, the greater the risk that the actual uncertainty will have a negative effect on the real economy. i shall now turn towards the future and discuss developments over the coming 1 - 2 years. right conditions for a recovery in the usa … one difference now compared with the situation one year ago is that the adaptation of the imbalances in the us economy has probably progressed further. consolidation of balance sheets has continued, productivity is strong and normal business activity patterns indicate that the conditions should be relatively favourable for an increase in industrial production during the spring. low stocks levels in relation to sales and an investment ratio that is below the long - term trend would indicate this is the case. an expansionary economic policy provides further support for the optimism. however, the question most people are asking themselves now, as they were in 2002, is whether the adaptation to the imbalances has reached a sufficient stage to enable a broad, lasting increase in demand that can take over as the driving force behind a production increase. it is much too early to be able to give a clear answer here. if we look at households in the usa, we can see that they have become more passive since the december inflation report was published. the explanation could be the security policy unease and the still weak stock markets. continuing high oil prices will also cut into disposable incomes. however, the expansionary economic policy should partly counteract these effects. all in all, i believe that the picture of a relatively prolonged recovery in the usa, where growth gradually increases over the year and