Did Imbalances Cause the Crisis?

But arguing that the imbalances played a sideshow in 2008-09 is not to claim that they are innocuous. They could still perpetrate the crisis predicted by the alarmists. As a matter of prudence, policies to contain them could still be warranted. The US fiscal deficit is a game changer in the debate, and it is already bridging the divisions between imbalance analysts. Policy options going forward will be the topic of a column for a future date.

References

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