This paper discusses recent empirical research on the interplay between fiscal policies and external imbalances in the G3 countries, focusing on the stock-flow dynamics of public and foreign deficits and debt accumulation

After narrowing modestly in 2013, the global scale of current account imbalances, and of excess imbalances, held steady in 2014. Over the last several years, while the country composition of imbalances has rotated somewhat, overall there has been little progress on reducing excess imbalances....