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Chicago Booth Finance Roundtable: Will Global Imbalances Expand or Diminish in 2020?

January 9 @ 6:00 pm - 9:00 pm CST

Global economic growth is slowing, in part because massive excess capacity in industry in China and tens of millions of unoccupied apartments are leading to reduced imports of machine tools and copper and other primary products. Germany and its neighbors have extraordinarily large trade surpluses. Taiwan, Singapore and Malaysia have even larger trade surpluses as a share of their GDPs. The European Central Bank under the leadership of its former chair has promoted the development of negative interest rates, in part to reduce the price of the Euro and sustain the large trade surpluses. The counterpart of these trade surpluses in Europe and Asia is a U.S. trade deficit of four percent of U.S. GDP, which has contributed to a U.S. fiscal deficit that is approaching five percent of U.S. GDP. These imbalances are likely to increase as growth slows. If the imbalances are too large to be sustained, they won’t be sustained. What’s it all mean to the world economy? Come to the year’s kickoff of the International Roundtable for the always provocative views of Dr. Aliber.

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