Global trade and the economic incentive polices of individual national economies will play an important role in the recovery from the current global decline. The US economy is promoting from the global economy during the current global decline. It may not feel like that, as we in the US now have about one-sixth of the labor force officially unemployed or underemployed. But the national income accounting is real. If not for our shrinking trade surplus, for example, the first quarter of this year would have seen a fall of 7.9% of GDP, instead of 5.5%. That’s a big difference in terms of output and employment. Countries that export a lot get hit harder in the decline as their trade surplus shrinks. And countries that export significant amounts to the US have also been hit hard. This seems to offer a lesson for developing countries. It’s good to make your trade diverse, and maybe not become excessively dependent on markets where there are enormous asset bubbles.