Who Will Run the World’s Deficits?
Periods of global expansion have virtually always been characterized by symbiotic imbalances, with some economies running large current-account surpluses and others running large deficits. But countries' willingness and ability to absorb excess capital is declining, raising the question: Who will run the world's deficits?
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SINGAPORE – These days everyone seems to want to run a current-account surplus. China has long run large surpluses. The eurozone is now running even larger ones, with swings in southern Europe augmenting Germany’s longstanding surpluses. Indeed, countries from Singapore to Russia are running large surpluses.