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Perception of global imbalances as a problem way off base

State of global economy more the result of, say, asset inflation, debt, social welfare and inequalities.

ONE of the perennial themes in reports from global economic institutions such as the International Monetary Fund and the Organisation for Economic Co-operation and Development is global imbalances perceived as surpluses and deficits on the current account among major economic powers.

Unhesitatingly and continually, the view is taken that imbalances are bad for the economy. It has become almost an obsession to offer policy options to reduce or remove imbalances characterised as a disrupting element in endeavours to get the global economy back on an even keel. China's surplus and the US deficit is constantly evoked and presented as a major risk. In Europe, the German surplus mirrored by deficits...

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