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Imbalances are back on the global agenda

Policymakers must overcome the mercantilist fallacy that the way to get rich is by running surpluses forever

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    • The view of many economists today is that if a crisis is going to strike, it is likely to be triggered in the US.
    • The view of many economists today is that if a crisis is going to strike, it is likely to be triggered in the US. PHOTO: BLOOMBERG

    Martin Wolf

    Published Wed, May 6, 2026 · 06:00 PM

    “AGAIN? Didn’t we just have this debate?” This is how the opening chapter of a collection of essays published by the Centre for Economic Policy Research, on The New Global Imbalances, starts.

    Yes, we did. We did so in the 1980s, in the 2000s and now, once again, in the 2020s.

    Once roughly every 20 years, it appears, the issue comes to the fore. This is so for two good reasons. One is that current account imbalances drive protectionist sentiment. The other is that they are harbingers of financial crisis.

    Global economyfinancial crisisIMFUS economyTradeTrump tariffs

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