Global Rebalancing: Now or Never

In the commentary "Global Rebalancing: Now or Never," Stephen S. Roach, a senior lecturer at Yale SOM and a senior fellow of the Jackson Institute for Global Affairs, writes, "Time and again, the lessons of troubled world economy are the same: An unbalanced world is an unsustainable world." He explains that behind most of the crises in recent history—from the 1980s Latin American debt crisis to the U.S. subprime crisis and European sovereign debt crises today—is a major global macroeconomic imbalance that could have been avoided with disciplined and responsible policies. Roach urges countries to ease their imbalances and outlines a plan for sustainable world growth that hinges on the rebalancing efforts of the United States and China. He calls for advanced economies, especially the U.S., to consume less and save more, and the developing world, especially China, to curb excess saving and consume more. 

Read the commentary on Yale Global Online, a publication of the Yale Center for Study of Globalization.