Sunday, May 31, 2009

Global Imbalances

The global imbalances story explaining the current crisis is gaining ever more adepts. It's fairly straight that U.S. officials claimed it, looking for guilt abroad will always be far easier, but now academics are pledging the same. Eichengreen wrote a piece based on the imbalances story that is worth reading.

1 comment:

Salvador said...

I agree. The absence of a financial market that would have grown alongside the growth of the real economy was not only an issue concerning China. Other countries didn’t encourage a better financial architecture, such as housing loans, then the world economy hadn’t financial channels to balance the enormous range of resources generated by economic integration of China and India, productivity gains motivated by the positive technological shocks during 90s, worldwide trade integration ,and other economic reforms. Only in housing, there is a huge deficit in most developing countries. The modernization and maturity of financial systems in developing countries will be one long term key solution to solve the world imbalances.