by Mark Thoma, University of Oregon (Department of Economics)

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Fed Watch: Denying the Great Adjustment

Posted on July 02, 2008

Tim Duy's latest Fed Watch looks at growing international imbalances that have US and emerging market policy makers on a collision course :Denying the Great Adjustment, by Tim Duy: While not always the dominant force in my outlook, the external imbalance consistently lurks in the background of the US economy. I tell local audiences that the imbalance represents a very simple reality the US consumes more than it produces, and the excessive consumption is provided by foreign producers. Eventually, maybe tomorrow, maybe years from now, those producers will desire to consume their own domesti...

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