International imbalances in balance of payments performance
have emerged as a major source of global fragility.
In this set of two articles, the authors consider
the nature and sources of these imbalances. It is
argued that the major reason for the apparent excess
of capital in developing countries which is then being
exported to the US and other developed countries is
the deflationary policies adopted by these governments,
which suppress domestic consumption and investment.
September 30, 2005.
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