After returning from the World Economic Forum meeting in Davos, Switzerland, in early February, Laura d'Andrea Tyson, the new dean of the London Business School, gave the delegates and speakers an overview of the attitudes expressed at the meeting over lunch.

The challenges and pressures facing the global economy are recognized as being four-fold, she said; the continuing pace of technological change, security challenges, the demise of Enron and the global economic situation, both medium- and long-term.

"The consensus -- although often wrong -- is that the outlook for 2002 is for a sluggish global recovery," Tyson said. "But there are continuing difficulties for emerging economies, which are likely to have a slow growth in trade."

With regard to the United States, she said the accepted wisdom is that despite signs of recovery, it is unlikely that the U.S. will post sustained growth of around 5 percent or 6 percent that it had in the mid-1990s. "I'm an optimist, though, and I foresee sustainable growth of around 3 percent," she said.

The outlook for Europe is mixed, she added, with slow growth for 2002, but tempered by concern among macroeconomists that there is no will to act to deal with the demand constraints on growth.

The report on Japan was less positive. In contrast to the U.S., she said, where the recession has been shallow and short-lived due to aggressive monetary action, Japan failed to act quickly and the macroeconomic policy tools deployed had no effect.

There was some good news, however.

"There are real signs of structural change," Tyson said, "Although at present they are not sufficiently broadly based to get Japan out of its deflationary spiral."