Larry Summers has been on a roll. First, there has been been his arguments on the secular stagnation. Then there has been his paper with a set of authors discussing their thesis that government debt policy has offset the impact of quantitative easing. Now there have been editorials for infrastructure development. Summers has been a one man crew supporting Keynesian policies. While there are other who have espoused Keynesian views, Summers has been using his intellectual prowess to provide a research foundation for his activist views. They should be listened to.
Of course, his infrastructure views is just highlighting the key view of the IMF in their latest WEO report which focuses on infrastructure development as a means of helping global growth. This viewed as a major turn-around for the IMF which has usually focused on austerity as a means of solving problems.
Global growth will continue to be slow in a world of further delevering. If growth is expected to increase and output gaps closed, there needs to be more fiscal work and less focus on monetary policy. A financial rally would continue if we can get a change in fiscal policy.