But another part is cyclical, meaning that it might fade out as soon as global economic growth turns a corner. So it’s a concern that if countries are not sufficiently committed to carrying out the necessary reforms, unsustainable imbalances might re-emerge which would then put the global recovery at risk.
Let me now focus, in turn, on signs of a “Great Rebalancing” in the United States, the euro area, and China, as well as on the role of macroeconomic policies in this process. Let me start with the United States. Before the collapse of Lehman Brothers in 2008, the large external deficits of the United States were a major source of concern.