Much of the discussion at the World Economic Forum in Davos has two themes. First, the continued robustness of the global economy as defined by sustained high growth and low inflation. Second, the steady rise in economic and financial risks.

The tendency is to treat these themes as competing and engage in aninteresting but inconclusive debate about their relative merits. A better approach is to recognise that these themes are consistent with structural changes in the world and seek torecalibrate the perspective used for defining the way forward.