Global Imbalances: In Midstream?

Olivier Blanchard and Gian Maria Milesi-Ferretti ()

No 7693, CEPR Discussion Papers from Centre for Economic Policy Research

Abstract: Before the crisis, there were strong arguments for reducing global imbalances. As a result of the crisis, there have been significant changes in saving and investment patterns across the world and imbalances have narrowed considerably. Does this mean that imbalances are a problem of the past? Hardly. The paper argues that there is an urgent need to implement policy changes to address the remaining domestic and international distortions that are a key cause of imbalances. Failure to do so could result in the world economy being stuck in "midstream," threatening the sustainability of the recovery.

Keywords: Current account; investment; Portfolio choice.; Saving (search for similar items in EconPapers)
JEL-codes: E21 E22 F32 F33 F36 F41 (search for similar items in EconPapers)
Date: 2010-02
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Citations: View citations in EconPapers (60)

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Working Paper: Global Imbalances: In Midstream? (2009)
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