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Short-Run Recovery and Long-Term Growth Agendas

The diversity of economic conditions around the world is increasing, and China and the United States are the economies most likely to lead the recovery, albeit at a subdued pace. Globally, the gaps that recently opened up between actual and potential output levels will take a long time to close. Even though fiscal stimulus plans will help narrow those gaps, the key to long term recovery is to strengthen potential output growth through innovation.

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