Global current account imbalances are near their highest in 150 years and increasingly persistent; macroeconomic forces remain the main driver, but resurgent industrial policy paired with consumption-suppressing measures, together with the dollar’s reserve status, entrench them, raising political, adjustment and financial-stability risks that call for an orderly, symmetric rebalancing.

Persistent excess current account imbalances are driven primarily by domestic macroeconomic factors, but resurgent industrial policy can shift the current account under certain conditions and vulnerable external balance sheets could interact with broader financial-stability risks in a disorderly unwind; an orderly, symmetric rebalancing and stronger multilateral surveillance are needed.

It depends.

Global supply-chain constraints steepen the Phillips Curve, making inflation more responsive to demand when supply is tight.

The Fed’s unusually rapid and globally synchronised tightening transmits abroad mainly through the global financial cycle and the dollar’s dominant role, rather than through expenditure switching, producing large spillovers that strengthen the case for independent financial-stability tools.

Energy-price shocks spread inflation from tradable goods to non-tradable services through real-wage resistance, without necessarily signalling de-anchored expectations.

The secular fall in global R* is driven mainly by slower productivity growth and ageing, while a shift towards intangible capital explains the weakness in investment.

Developments overseas account for about half the variation in UK activity and nearly all the variation in UK financial conditions, with outsized effects on tail risks.

In financial crises, investors rush specifically for US-dollar cash rather than other currencies, reflecting the dollar’s dominant role in global finance.

Sector-specific supply shocks can spill over into economy-wide demand effects when sectors are complementary, amplifying their impact on output and prices.

Rising world-growth expectations explain part, but not all, of the 2016–17 fall in equity-market volatility, hinting at optimism that could later reverse.

Foreign credit booms strongly predict domestic banking crises, with the link running through financial channels rather than trade.

Financial integration reduces business-cycle synchronisation after common shocks but raises it after country-specific shocks, leaving its net effect ambiguous.

A 1% slowdown in Chinese growth would cut UK GDP by about 0.1%, mostly indirectly via the UK’s main trading partners rather than direct links.

A 10% fall in cross-border credit lowers house prices by under 1% in advanced economies but over 3% in emerging markets.

Prolonged loose US monetary policy can fuel financial imbalances, so an accommodative Fed risks sowing the conditions for the next crisis.

A renminbi revaluation is no cure-all for Latin America: a 10% revaluation would cut Chinese growth by ~0.5%, US growth by ~0.15% and Latin American growth by ~0.3%.