CAMBRIDGE – This year has begun on a note of cautious optimism for the global economy. Europe is back from the brink. The United States did not fall over the fiscal cliff. Japan is moving to change its economic strategy, and China appears to be getting back on track.
Financial-market indices in the US, moreover, are near pre-crisis levels, and expected volatility is at multi-year lows. Major financial institutions are, for the most part, better capitalized than they have been in a long time. Balance sheets have been repaired, and many actors are awash with cash. While 2013 will not be a banner year, it may nonetheless come to be viewed as the first year of the post-crisis period.