The G7 meeting in Aylesbury, about 40 miles outside London, raised a question that many economists have been asking: Can an expansionary monetary policy alone lift a nation out of an economic slump?

Although it has revved up its money-printing machine over the last two years, the United States has failed to produce a sustainable economic recovery despite the progressive depreciation of the US dollar against most other major currencies. Of course, the stock market is doing well with so much liquidity sloshing around. But economic growth has remained anemic and the unemployment rate, persistently high.

Japan began administering similar treatment to cure its economic woes, which are manifest in stubborn deflation. Record low interest rates and an ample supply of liquidity have combined to boost Japanese share prices. Yes, the yen has devalued as expected, but there is little indication of a pick-up in domestic investment and consumer demand, which the Japanese version of quantitative easing was designed to stimulate.