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Abstract
This chapter looks to answer two complex questions. First, why might a country want to reduce its current account deficit or surplus? And second, why might the international community ask the country to do even more? These questions were inspired by the G20’s request to the IMF to help develop indicative guidelines to help reduce global current account imbalances. Answers to them are needed to inform the design of “rules of the game” that countries should abide by, and to contribute to the development of corresponding indicative guidelines.2 The chapter first discusses domestic reasons why countries may want to reduce current account deficits and surpluses, and then turns to multilateral considerations for reducing external imbalances before looking at the case for establishing rules of the game.
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