The world's economy is in excellent shape, but its politics is disturbing. This contrast, discussed by Lawrence Summers in his column (this page, December 26 2006), was also a focus of last week's annual meeting of the World Economic Forum in Davos. The question is whether and how this divergence might end.

The facts seem clear: the world economy is in a golden period of broadly shared growth, high profits, modest real and nominal interest rates and low prices for risk. It has, on its way, adjusted with some ease to a series of shocks: the stock market crash after 2000; the terrorist outrages of September 11 2001; wars in Afghanistan and Iraq; friction over US policies; a jump in real oil prices to levels not seen since the 1970s; the cessation of negotiations in the Doha round; and the confrontation over Iran's nuclear ambitions. It has coped, as significantly, with China's and India's economic resurgence.