There was a time, not too long ago, when the US president and the German chancellor agreed that the German economy should act as a ?locomotive? to stimulate global demand.

There is no chance that George W. Bush and Angela Merkel could have held such a discussion at their recent summit in Washington. Global economic demand management has been out of fashion for a while. The notion of a locomotive arose out of the 1978 summit of the Bonn Group of Seven leading industrial nations. Helmut Schmidt, the German chancellor at the time, was a reluctant convert to the idea. He worried that it might overburden Germany?s economic capacity.