Looking back on the global trend before the Lehman shock, we saw excess consumption and investment on the back of soaring asset prices in the United States, and an expansion in current account deficit as the mirror image of these domestic excesses.
On the other hand, emerging economies took a cautious approach to investment, partly because of the trauma of past balance-of-payment crises, and as a result, their current account surplus accumulated. When asset prices plunged and domestic demand shrank in the United States, the savinginvestment balance subsequently recovered. The expanding trend of U.S. current account deficit stopped.