Franklin Roosevelt. What would he do?  © Getty Images

What happens if the world succumbs to another recession? The recovery we’ve seen so far has hardly been stellar and there are worrying signs: China has slowed, commodity prices have collapsed, some emerging nations are already contracting, US equities may only be able to defy gravity for so long and, despite remarkably low interest rates, there are few signs of any positive response from investment.

In the past, one easy answer would have been to cut interest rates. Yet these are already at rock bottom. Another would have been to launch a large fiscal stimulus. Yet government debt levels are in many cases already very high and, based on contingent future liabilities, set to head a lot higher in the years to come.

A return to quantitative easing seems likely, therefore — initially, at least. Read more