Giuseppe Bertola, Anna Lo Prete, 28 February 2015

The large international imbalances accumulated in the Eurozone have proven difficult to unwind during the recent Crisis. This column argues that market reforms had a role in generating current account imbalances, and that patterns of relative labour market regulation could be equally important in the aftermath of the Crisis.

Aqib Aslam, Samya Beidas-Strom, Marco Terrones, Juan Yépez, 29 October 2014

Global current-account imbalances narrowed substantially over the past eight years. As a result, the systemic risks associated with these imbalances have decreased. This column argues that despite this narrowing, the net creditor and debtor positions diverged further. Some large debtor economies remain exposed to changes in market confidence. Containing remaining imbalances requires a rebalance in global demand.

Giancarlo Corsetti, Philippe Martin, Paolo Pesenti, 31 January 2013

Current-account imbalances in Europe are at the heart of the crisis .This column argues that relative price adjustment need not be as dramatic as some observers claim. In order to foster rebalancing, policy should target obstacles to firms' entry, startup costs, and the incentives for product differentiation, letting relative prices and wages adjust in equilibrium. Setting up firms and new production lines is costly and in the current circumstances, policy should also address tight credit constraints on investment and firms’ activity.

Claudio Borio, Piti Disyatat, 26 July 2011

Global imbalances loom large in G20 and IMF discussions, but are they to blame for the global crisis? This column argues that the emphasis on current-account imbalances is unhelpful and diverts attention from the monetary and financial factors that really sowed the seeds of the crisis.

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