Why is the global recovery so weak? Some have argued the crisis was so deep that recovery takes time. Others have argued that the euro crisis has delayed global recovery. To some extent both are true. But the focus has been on macro instruments, especially monetary, while micro reforms have not received sufficient attention, and even five years later recovery has been weak.

With the election in the United States now over, how to get a stronger US and global recovery takes greater urgency. One reason the US recovery remains weak is the lack of comprehensive micro reforms. There has been too much focus on macro solutions. QE1 helped stem the crisis but QE2 and QE3 have largely leaked abroad and created asset bubbles and currency problems elsewhere. They have not helped the recovery back home. The auto industry bailout and restructuring was a good example of a well designed micro program, but the lack of a carefully crafted home mortgage program slowed down the housing recovery. Without a revival of the housing market a real sustained recovery is not possible.

Macro solutions can stem a crisis, but only with deeper micro reforms, which often require more political consensus and careful and painstaking detail, can sustained and robust recovery be achieved.