chapter  12
Global Imbalances and the Need for Policy Adjustment
ByJosé Manuel González-Páramo
Pages 10

This chapter focuses on what seems to be the most popular topic among economic commentators and policy makers with an international interest: global imbalances. The interest in and attention given to global imbalances is not only proportional to the record size of the US current account decit and the global implications of its unwinding, but also to the longevity of this debate, since the resilience of the US current account decit has so far confounded the expectations of many economists. This chapter gives a view from the other side of the Atlantic on global imbalances. In particular, it touches upon three aspects: (1) the causes of global imbalances; (2) how worried we should be about global imbalances and (3) the need for policy adjustment.