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Abstract
In the wake of the financial crisis, policymakers around the world renewed their focus on key imbalances in major economies with an eye toward reducing vulnerabilities that led to market upheaval and global recession. Two questions have received particular attention. First, were the main global fault lines responsible for the crisis rooted in global imbalances? The answer is not as straightforward as many presume if one carefully distinguishes between symptom and cause. Second, is global rebalancing essential for securing a durable recovery? A consensus among policymakers has been building that such a multilateral undertaking would benefit the global economy going forward and should be encouraged through policy collaboration.
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