Ready for liftoff?!

Main engine start, and liftoff.

AMSTERDAM For much of the year, investors have been fixated on when the Fed will achieve liftoff that is, when it will raise interest rates by 25 basis points, or 0.25 , as a first step toward normalizing monetary conditions. Markets have soared and plummeted in response to small changes in Fed statements perceived as affecting the likelihood that liftoff is imminent.

Nobel Prize nominee Hernando De Soto recognized that the key to economic liftoff for most developing countries is to tap the vast amounts of uncapitalized land.

From this standpoint, the Fed s decision to wait to begin liftoff is eminently sensible. And, given that China holds (and is therefore now selling) euros as well, the European Central Bank also should bear this in mind when it decides in December whether to ramp up its own program of quantitative easing.

Governments that do embark on structural reform often find it frustrating to wait for that often elusive critical mass of revitalized sectors to materialize and economists find it very difficult to predict the timing and magnitude of the growth liftoff that should follow. Complicating matters further, the inevitability of unanticipated developments, whether homegrown or external in origin, means that course corrections often are needed.