As the fifth anniversary of the disorderly collapse of theinvestment bank Lehman Brothers approaches, some analysts will revisit thecauses of an historic global “sudden stop” that resulted in enormous economicand financial disruptions. Others will describe the consequences of an eventthat continues to produce considerable human suffering. And some will sharepersonal experiences of a terrifying time for the global economy and for thempersonally (as policymakers, financial-market participants, and in theireveryday lives).

As interesting as thesecontributions will be, I hope that we will also see another genre: analyses ofthe previously unthinkable outcomes that have become reality – with profoundimplications for current and future generations – and that our systems ofgovernance have yet to address properly. With this in mind, let me offer four.

The first suchoutcome, and by far the most consequential, is the continuing difficulty thatWestern economies face in generating robust economic growth and sufficient jobcreation. Notwithstanding the initial sharp drop in GDP in the last quarter of2008 and the first quarter of 2009, too many Western economies have yet torebound properly, let alone sustain growth rates that would make up fully forlost jobs and income. More generally, only a few have decisively overcome thetrifecta of maladiesthat the crisis exposed: inadequate and unbalanced aggregate demand,insufficient structural resilience and agility, and persistent debt overhangs.

The net result goesbeyond the weak growth, worsening income inequality, high long-termunemployment, and alarming youth joblessness of the here and now. Five yearsafter the global financial crisis, too many countries are being held back byexhausted and out-dated growth engines. As a result, prospects for a rapid,durable, and inclusive economic recovery remain a serious concern.

Given this harshreality, it is not surprising that the second previously unthinkable outcomeconcerns inadequate policy responses – namely, the large and persistentimbalance between the hyperactivity of central banks and the frustratingpassivity of other policymakers.

The big surprise hereis not that central banks acted decisively and boldly when financial marketsfroze and economic activity plummeted. Given their relatively unrestrictedaccess to the printing press and their high degree of operational autonomy, onewould expect central banks to be active and effective first responders. Andthey responded in an impressive and globally coordinated fashion.

What is surprising isthat, five years after the crisis, and four years after disrupted financialmarkets resumed their normal functioning, Western economies stilloverwhelmingly rely on central banks to avoid even worse economic performance.This has pushed central banks away from their core competencies as they havebeen forced to use partial and imperfect policy tools for quite a long time.

This outcome reflectsdomestic political polarization in the United States and the complexity ofregional interactions in Europe, which have blocked comprehensive and balancedpolicy approaches. To appreciate the extent of the problem, consider therepeated failure of the US Congress to pass an annual budget (let alone delivermedium-term reforms) or incomplete eurozone-wide initiatives at a time ofalarming unemployment and residual threats of financial disruptions.

Such politicaldysfunction has undermined the responsiveness of other policymaking entities,including those that possess better tools than central banks. This has compelledcentral bankers to remain in the policy forefront, building one bridge extension afteranother as they wait for other policymakers to get their act together. Theresult has been to expose Western economies to ever-more experimental measures, with considerableuncertainty about the longer-term impact of operating sophisticatedmarket-based systems on the basis of artificial constructs.

The third previouslyunthinkable outcome relates to how developing countries have fared. Having initiallysuffered from the financial crisis as much as Western countries did (indeed,more in terms of output and trade), these historically less-robust economiesstaged a remarkable comeback – so much so that they became the engine of globalgrowth. In the process, however, they slipped into an unbalanced policy mixthat now threatens their continued growth and financial stability.

Renewed risks offinancial instability point to the fourth and final surprise: the failure torecast major contributors to the crisis in a credible, sustainable, andsocially responsible manner.

Consider largeWestern banks. Given their systemic importance, many were bailed out and, withcontinued official support, returned to profitability quite quickly. Yet theywere not subject to windfallprofit taxation, nor have policymakers sufficiently altered structuralincentives that encourage excessive risk-taking. In the case of Europe, onlynow are banks being pushed to deal decisively with their capital shortfalls, leverageproblems, and residual weak assets.

Call me a worrywart,but I remain concerned by the extent to which our systems of economicgovernance have lagged in addressing these four outcomes. The longer thisunusual environment persists, the greater the risk that the disruptiveramifications of the 2008 crisis will continue to reach far and wide, includingto future generations.