The world economy is again struggling with an old problem. Some countries save more than they invest or consumes while others spend more than they produce. These current account gaps narrowed for several years after the 2008 financial crisis. They are now widening again.

China’s surplus has grown. The United States runs a large deficit. Emerging markets, including India, are exposed to the spillovers. The political response in major economies has been predictable: tariffs, industrial subsidies, trade restrictions and calls for economic self-reliance. These tools may serve domestic politics. They will not correct global imbalances.

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