Economic turbulence and uncertainty persist at the end of the 1980s, although since 1983 governments industrial countries have managed to reduce inflation and maintain a positive rate of growth. But the problems that persist include: high real interest rates, declining investment rates, volatile exchange rates, growing current account imbalances, rising protectionism and high unemployment. These problems are mainly the legacy of past inflationary policies and structural rigidities, but they are also the consequence of the mismatch of macroeconomic national policies and of the combination of loose fiscal policy and tight monetary policy, especially in the USA. These have led to slowed growth of production and trade with the consequence that the world economy faces continuing risks.
In the case of Germany in 1997, the traditional certainties of pride in institutions that worked, of a social contract that offered good jobs, salaries and benefits, as well as a real sense of identity, were severely challenged. The loss of these certainities was seen as difficult to resolve by conventional remedies.