International imbalances in balance of payments performance have emerged as a major source of global fragility. In this set of two articles, the authors consider the nature and sources of these imbalances. It is argued that the major reason for the apparent excess of capital in developing countries which is then being exported to the US and other developed countries is the deflationary policies adopted by these governments, which suppress domestic consumption and investment.
 

• The Myth of a Global Savings Glut
  C.P. Chandrasekhar & Jayati Ghosh
   
   
  
• Developing Countries and The Dollar
  C.P. Chandrasekhar & Jayati Ghosh
    

September 30, 2005.