Bank of Canada Governor Tiff Macklem says “imbalances” among major economic powers, including persistent trade surpluses in China and over-investment in the United States, pose growing risks to the global economy.
Speaking in Paris on June 23, Macklem pointed to China’s persistent trade surpluses and high savings rate, the United States’ large trade deficits financed by capital inflows and low national saving, and Europe’s weak investment and productivity growth as examples of widening global imbalances.
“When imbalances are too big and too one-sided for too long, they become excessive. When needed adjustment is not happening, imbalances can spill over, and then we all feel it,” Macklem said in a speech to business leaders….