- G7 Economists Memo on Global Imbalances1.28 MB
Balanced growth and reciprocal trade are fundamental to a well-functioning global economy. Growth is “balanced” when it is durable, resilient, and consistent with national security. Trade is “reciprocal” when it is mutually beneficial for countries.
The rise of excessive current account deficits and surpluses reflects increasingly unbalanced growth dynamics in China, the European Union (EU), and the United States (US).
China has chronically low domestic consumption, the EU suffers from persistently weak levels of productive investment, and the US has enduring fiscal deficits that are too large relative to economic conditions.
These structural divergences underpin persistent external imbalances and contribute to global tensions. These risks call for urgent policy action and not waiting for overly precise measures of excess imbalances.
G7 Economists Memo
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