Discussion Paper 18/2019 Global Imbalances: A Job for the G20? Roger A. Fischer Global imbalances: A job for the G20? Roger A. Fischer Bonn 2019 Discussion Paper / Deutsches Institut für Entwicklungspolitik ISSN (Print) 1860-0441 ISSN (Online) 2512-8698 Die deutsche Nationalbibliothek verzeichnet diese Publikation in der Deutschen Nationalbibliografie; detaillierte bibliografische Daten sind im Internet über http://dnb.d-nb.de abrufbar. The Deutsche Nationalbibliothek lists this publication in the Deutsche Nationalbibliografie; detailed bibliographic data is available in the Internet at http://dnb.d-nb.de. ISBN 978-3-96021-110-5 (printed edition) DOI:10.23661/dp18.2019 Printed on eco-friendly, certified paper Roger Fischer leads the G7/G20 division of Germany’s Federal Ministry for Economic Cooperation and Development (BMZ). This paper reflects only the author’s personal views and cannot be construed as indicating the positions of Germany’s Federal Government or any part thereof. Email:
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[email protected] www.die-gdi.de Abstract Excessive imbalances between countries’ current accounts are significant for two very different reasons. First, they are objects of contention between the Group of Twenty (G20) countries, which use imbalances to try to force other countries to change their policies, and even to justify unilateral trade measures – thus making it harder for G20 members to reach consensus on other important issues. Second, imbalances are not always based on sound economic reasoning and excessive imbalances signal that the global economic system is malfunctioning: It cannot effectively transform available funds created by savings, credit or monetary expansion into consumption and productive investment.