Real Progress In Action

Global imbalances are back, and the conventional diagnosis may be wrong. Conventional analysis by the International Monetary Fund, G7 + OECD traces the imbalances to domestic saving–investment gaps, pointing to "excess saving in China and the EU, and too little saving in the United States." In a new working paper, GDP Center Non-Resident Senior Fellow @YanLian31677392 + Center Director @KevinPGallagher argue that the root cause of the imbalances is in fact the financial imbalances generated by the international monetary and financial system (IMFS) itself. Dollar dominance and the lack of a credible global lender of last resort push countries to self-insure. For this month's T20 Summit in New York, the authors contribute to a policy brief ahead of the December G20 Leaders' Summit. They present two priorities for G20 discussions on imbalances: 📍 Strengthening the global financial safety net (GFSN) 📍 Accelerating multilateral development bank (MDB) reform The goal is to make these systems "not just bigger, but better." 📄 Read the working paper: gdpcenter.org/3UYqFCV 📄 Read the T20 policy brief: gdpcenter.org/47VEKUA #G20 #IMF #OECD #T20 #GFSN #GlobalImbalances