Global Economic Prospects 2015

The global economy is still struggling to gain momentum. Read more ...

Development Prospects

Providing information, analysis, and advice on global trends in the world economy.  Find out more ...

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Submitted by cosmas sikahala on
.....Global imbalances are neither just a temporary aberration that can be addressed through economic policy actions in the U.S. and China nor are they only the result of globalization as implied......couldn't agree more! There is a growing need to discuss the risks and implications of global imbalances especially because developed countries have continuously accumulated debt at unsustainable pace, including increased unemployment rates and significant trade imbalances leading to their diminished comparative advantage with emerging markets. The United States for example had previously been seen as an attractive place to invest, and that given the excess of savings (relative to investment) in the rest of the world, capital flows into the U.S. would reflect an efficient functioning of capital markets. However due to increased globalization the opposite is true today because many corporations in the U.S and other developed economies are rushing to invest in emerging developing economies where there is cheap labor and abundance of cheap raw materials. The developed nations are therefore realizing increased trade deficits as a result of diminished exports and more imports among others resulting in trade imbalances.