Us finance Spencer Platt/Getty Images

The Persistence of Global Imbalances

When the world's leading central bankers gathered at their annual meeting in Jackson Hole, Wyoming, the main focus of discussion was global trade and imbalances. And here, the old adage applies: the more things change, the more they stay the same.

JACKSON HOLE, WYOMING – The primary focus of this year’s Federal Reserve Bank of Kansas City symposium in Jackson Hole, Wyoming, which convenes the world’s leading central bankers, was not explicitly monetary policy. Fed Chair Janet Yellen’s opening remarks emphasized the changes in regulatory policy that followed the 2008 global financial crisis, while European Central Bank President Mario Draghi’s luncheon address dwelled on the need for continued reforms in Europe to sustain the eurozone’s recent economic recovery.

But it was global trade and finance – the key forces shaping the economic outlook and financial market conditions with which central bankers grapple – that took center stage. On the effects of the globalization of trade in goods and services, the discussion emphasized the costs to domestic employment, wages, and inequality. On the finance side, international capital flows and global imbalances were the primary focus.

And here, the old adage applies: the more things change, the more they stay the same. For most of the last four decades, the United States has been a net importer of capital from the rest of the world.

To continue reading, please log in or enter your email address.

To read this article from our archive, please log in or register now. After entering your email, you'll have access to two free articles from our archive every month. For unlimited access to Project Syndicate, subscribe now.

required

By proceeding, you agree to our Terms of Service and Privacy Policy, which describes the personal data we collect and how we use it.

Log in

http://prosyn.org/r1GKstL;

Handpicked to read next

Cookies and Privacy

We use cookies to improve your experience on our website. To find out more, read our updated cookie policy and privacy policy.