The debate on global imbalances

The persistence of global imbalances in trade and capital flows, particularly between the United States and the rest of the world, has been a major preoccupation for economists over the last few years. The United States current-account deficit has been at record levels, currently equivalent to around 6% of GDP. Meanwhile, several Asian and oil-exporting countries have been running the bulk of the world's current-account surpluses, building up their official reserves and lending the money back to