Discussion paper

DP7693 Global Imbalances: In Midstream?

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.


Blanchard, O and G Milesi-Ferretti (2010), ‘DP7693 Global Imbalances: In Midstream?‘, CEPR Discussion Paper No. 7693. CEPR Press, Paris & London. https://cepr.org/publications/dp7693