In his keynote address to the recent conference on macroeconomic challenges that was organised by the Bank, Professor David Llewellyn argued that none of the proposed solutions would be sufficient on their own, and that unless a number of solutions were implemented concurrently, a negative outcome was more likely.
In his view, the required adjustment includes increased savings in the US including a reduction in the fiscal deficit; reduced savings in China, combined with improved social security safety nets in that country; a move away from the dollar peg by Asian economies and a depreciation of the US dollar; and a rise in aggregate demand in Japan and the euro area, accompanied by structural reform in the latter.