US Macro Imbalances
POLICY NOTE
(5.13 MB)
In this context, “macro imbalances” are trends or cycles in net borrowing flows that may be strong enough to threaten the system’s stability unless offsetting policies are put into place.
This paper is about patterns of net borrowing by major “institutional sectors” in the US economy– households, the rest of the private sector or “business,” government, and the rest of world – and their relationships with post-WWII business cycles and salient trends. By standard national accounting principles, the sum of all sectors’ net borrowing levels must be zero.