Paulson: Decoupling is a "myth"

The FT reports that G7 finance ministers now expect sub prime loses to reach $400bn—far more than the $100-150bn previously estimated. Tucked away at the bottom of the piece is an interesting quote from Hank Paulson, the US Treasury Secretary, saying that decoupling—the idea that other countries would not be effected by a US recession as there are enough alternative motors of growth—is a myth.  Paulson might be right, economists are split on the matter, but it is a surprisingly stark quote from the normally more diplomatic Mr Paulson.