Global imbalances: time for action

Abstract

Increasing nervousness in world financial markets give new relevance to the long-standing issues of global current account adjustment. It reminds policymakers that this adjustment, if improperly managed, could lead to further drops in assets prices, disruptions in the global trading system, and possible world recession. The authors of this Policy Brief assess how to achieve an orderly reduction in the large and unsustainable global current account imbalances. The Policy Brief is the result of a joint conference held in Washington, D.C. on February 8 and 9 2007.