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One year on from the onset of the global crisis, as policymakers turn from firefighting to considering the next steps for recovery, a key question is whether there has been a severe but temporary setback to economic growth or a permanent adjustment in long-run projections. Could this crisis and the cost in terms of public finances haunt the world economy for many years to come? Many analysts would agree that, compared with pre-crisis assessments for the GDP outlook, this recession will cast a long shadow over prospects for the economies most involved, chiefly the US and Europe.
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