If everything breaks right, the global economy could grow by 4 percent in 2011.

Indeed, after four years of either recession or sub-par recovery, the process of balance-sheet repair, while not yet completed, is under way, and may result in less saving and more spending to boost growth in advanced economies. The damage from the financial crisis is still ongoing, but stronger growth can heal many wounds, especially debt-driven wounds.

So far, the downside and upside risks for the world economy are balanced. But if sound government policies in advanced and major emerging economies contain the downside risks that are more prevalent in the first half of this year—which derive from political and policy uncertainty—a more resilient global economic recovery could take hold in the second half of 2011 and into 2012.

This article comes from Project Syndicate.

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