The new global imbalances: the launch of Paris Report 4

The fourth Paris Report, The New Global Imbalances, examines the return of global imbalances amid rising geopolitical tension, financial fragility, and shifting trade dynamics. This is the fourth output of the joint CEPR-Bruegel initiative: Important Topics of Common European Interest (ITCEI). At this event, Jeromin Zettelemeyer and selected authors discussed why global imbalances matter again, what has changed since the pre-crisis era, and how policymakers should respond in a world of heightened uncertainty and diminished cooperation.

Focusing on the US, China, and Europe, the Report proposes coordinated rebalancing: higher public saving in the US, stronger consumption in China, and increased investment in Europe, while acknowledging coordination may be difficult. It also outlines strategies for others to strengthen resilience, manage China’s export surge, and safeguard rules-based trade. The result is both a diagnosis and a call to action: without policy adjustment, global imbalances are unlikely to unwind smoothly, but instead risk correcting through financial stress, trade conflict, or both.