There is need to design financial instruments that would help people to reduce their risk and vulnerability whether it is for smoothening incomes or ensuring higher education for family members or reducing exposure to health shocks.
If we look back to the middle of the 1980’s, the last time global imbalances were considered to be a problem of the world economy, the current account deficit of the United States peaked at 3.5% of GDP. Looking at the details, however, there are some interesting differences between 2004 and the middle of the 1980s.