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Is it Really a Good Idea to Reduce Global Imbalances in Times of Crisis?

André Cartapanis * Professeur, Sciences Po Aix. Contact :

Is it really a good idea to consider that reduction of global imbalances is a priority, as proposed by the participants at the G20 Finance in Washington on 13 and 14 April 2011, adopting a set of indicative guidelines to address major and persistently large imbalances? To answer, several questions must be addressed. What was the role of global imbalances in the rise of financial fragility before the crisis? What are the theoretical foundations of such a limiting external surpluses and deficits? Is it an intrinsic objective of economic policy, or rather an intermediate target in the way to more coordination in economic policies and exchange-rate dynamics? And above all, is it appropriate in times of crisis?

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