Oil and the Tenuous Global Balance C.P. Chandrasekhar and Jayati Ghosh

High and rising levels of the prices of oil have stoked dormant fears of a global economic shock comparable to those experienced in the 1970s. However, early evidence points to a strengthening of growth in the US, despite the current tenuous equilibrium in which global surpluses finance an ever widening US current account deficit.  The authors discuss the possible reasons for this tendency.

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