(FORTUNE Magazine) – These are the best of times. The economy is stronger than it has been in decades. Inflation is low. The outlook is almost uniformly positive. No, not in the U.S. In the rest of the world.

In America the current expansion may now be "self-sustaining," as Fed chairman Alan Greenspan has dubbed it, but there remains something fitful about it. The past few weeks of economic data have surprised mostly on the downside. GDP growth may still top 4% this year, but it doesn't feel like the 4% growth of the late 1990s.

For the rest of the world, though, the late '90s actually weren't all that great and the mid-'00s are much, much better. "World growth has just been astounding this year," says Harvard professor Kenneth Rogoff, who recently completed a two-year stint as chief economist of the International Monetary Fund. It's not just the usual suspects like China and now India. Pakistan's economy is strong. Brazil is doing well. Japan is finally growing again. The IMF is forecasting that 2004 and 2005 will be the best two-year stretch for global economic growth in 26 years.

Just what was going on 26 years ago? The U.S. economy was growing, and the unemployment rate was slowly falling. But it is not looked back upon as halcyon era (except of course by fans of the Bee Gees and Triple Crown horse racing). Jimmy Carter was President, inflation was everywhere, the stock market was going nowhere, the great tax revolt was brewing, and Americans were just starting to freak out about the competitive threat posed by Japan. There may be a pattern here. For all the incessant talk of America's role as the "engine" of the global economy, the world seems to do better when that engine is sputtering just a little bit. Not when it has stalled, mind you: When the U.S. economy falls into recession, the world suffers too. (But the 2.4% global economic growth recorded by the IMF in 2001, when the U.S. had its last downturn, wasn't all that much worse than the 2.8% of 1998, when the U.S. was booming.)

Some of this is coincidence. "The developing countries' business cycles are surprisingly uncorrelated with U.S. cycles," says Rogoff. "When a poor country starts running its economy better, it will thrive no matter what is going on elsewhere. Unfortunately, the opposite is true as well."

But there may have been something about the structure of the late-1990s global economy--dominated by a U.S. that voraciously vacuumed up capital, commodities, and talent--that made things particularly hard on the Brazils and Indonesias of the world. "Mexico in 1994 and Asia in 1997 are case studies of how the U.S. economy and the U.S. financial system work disruptively," says Cees Bruggemans, chief economist of South Africa's First National Bank. The main problem was the strength of the dollar--oft trumpeted as one of the great successes of President Clinton's economic policy, but a source of inflationary pressure and financial stress for much of the rest of the world.

Now, says Bruggemans, the situation is much better for countries like his: "The U.S. economy is growing, and adequately growing, but at the same time interest rates are very low, and the dollar is weak. It is a combination which doesn't put too much pressure on emerging markets."

It is also a combination that brings unease in the U.S. Even if you don't believe that U.S. strength was to blame for other countries' troubles in the 1990s, it is undeniable that the troubles abroad made life easier for Americans. Plummeting demand in the aftermath of the Asian crises brought ultralow gas prices. Slow growth in Europe brought investment. The strong dollar made the electronic tools of the new economy ever cheaper for consumers and businesses.

Now those currents have reversed. Gas is expensive, the stock market is dead in the water, and while heavy buying of U.S. Treasuries by Asian central banks has kept the dollar from falling against the currencies of the countries that produce most of our favorite gadgets, that can't go on forever. The key is whether the U.S. can keep struggling against those currents without capsizing. A sharp drop in the dollar, a sharp rise in inflation, or yet another collapse of the stock market would benefit almost no one. But a U.S. growing in fits and starts, beset by worries about the dollar, the stock market, and overseas competition, may be just what the rest of the world needs.