June 29, 2026 | 09:00 – 18:00 (France time), on-site at Palais Brongniart

Global imbalances: the old and the new

After more than a decade of narrowing global current-account imbalances following the 2008-2009 financial crisis, these imbalances widened significantly from 2020. This may herald a structural shift in how savings, investment and trade flows interoperate (IMF, 2025). This resurgence of economic divergence reawakens familiar systemic risks that have long characterized global macro-financial cycles, such as financial instability, misallocation or trade conflict risks (Pinchetti, 2025). There are certainly some commonalities with previous episodes (Bénassy-Quéré, 2026). However, what distinguishes this episode is not only the magnitude of the widening but the fact that some key contextual elements have changed: geopolitical tensions have become particularly complex in a multipolar world; the nature of globalization itself has evolved with to the development of global value chains, which makes countries more interdependent but also the analysis of current account surplus/deficit more difficult.

Which policies?

Macroeconomic research gives clear insights about the solutions to global imbalances. At their root lie persistent domestic distortions. In surplus countries, precautionary saving remains elevated, social safety nets are underdeveloped and investment is overly concentrated in export-oriented. In deficit economies, dependence on external financing is reinforced by weak private saving and structural fiscal laxity.

Correcting these imbalances demands more than short-term macroeconomic management — it requires patient, coordinated structural reform. At the multilateral level, policymakers have begun to acknowledge that external divergences are no longer adequately explained by bilateral trade flows, but by macro-financial incoherence across a fragmented global system. Without coordination, what begins as national adjustment failure could evolve into global dislocation.

Learning from the Japanese experience: lessons from the Plaza Accord

The Plaza Accord of September 1985 was a historically unusual attempt by the major advanced economies to address global imbalances through coordinated exchange rate adjustment. However, although it is often presented in Europe as the symbol of the benefits of international cooperation, this is not the case everywhere in the world. Despite its success in correcting an overvalued dollar, the Plaza Accord did not eliminate underlying global imbalances. In China, the dominant interpretation is that external pressure for exchange rate adjustment undermined Japan’s competitiveness and set the stage for decades of economic stagnation. As for the US, they drew a lesson that external imbalances can be corrected through pressure and policy leverage rather than through structural adjustments (Hoshi, 2026).

The major problem is that the misinterpretations that emerged from the U.S.–Japan experience now interact in a particularly destabilizing way in the context of the U.S.–China imbalance. Economic policy has become increasingly intertwined with geopolitical rivalry. In this context, the misinterpretations of the Plaza Accord and the U.S.-Japan relation have narrowed the space for cooperative adjustment. In this context, the BdF-FFJ joint lab aims at bringing together leading researchers from academia, central banks, and financial institutions to present research findings related to these topics. Through this collaboration, we anticipate gaining a broader perspective on current trends, as well as practical results and recommendations.