Reflections on Global Account Imbalances and Emerging Markets Reserve Accumulation

The lecture focuses on some implications -- both positive and normative -- of the most surprising development in the international financial system over the last half dozen years. That development is the large flow of capital from the world’s most successful emerging markets to the traditional industrial countries, and the associated enormous buildup of reserves in the developing world. This was neither predictable nor predicted and the implications are large and have not yet fully been thought through.