In the past ten years huge economic imbalances among US-Asia as well as eurozone countries
have built up which have led to numerous crisis situations. Thus the goal of this book is to
find out if economic imbalances are sustainable or if they need to be rebalanced? What role do
distinct national policies play? The author is going to compare the imbalances of US-China with
the intra-euro imbalances of Germany Spain and Italy. Firstly the historical development of
the economic imbalances is presented in order to point out the unprecedented height of the
mentioned imbalances. Furthermore the author is analyzing the causes of imbalances by
presenting the development of the competitiveness the saving- investment rates the financial
markets as well as the different national policies. It is shown that distinct national policies
were the underlying causes for the development of such high economic imbalances. After having
seen the historical development as well as the causes the author describes the possible costs
and benefits of having imbalances as well as the implications of the global financial crisis
and the current European crisis. Due to the increasing globalization the financial crisis
spread fast and led to huge losses and decreasing investor s trust in European countries. This
resulted in the European crisis which subsequently could also endanger the global economy.
Because of the huge crisis impact traditional and alternative balancing channels are also
compared. Despite supporting measures such as restrictive fiscal policies and financial
assistance Europe is still suffering from an economic downturn whereas the US returned to a
slow economic recovery. At the end the author concludes that global imbalances need to be
rebalanced in order not to avoid reaching an unsustainable level. The occurring as well as
rebalancing of economic imbalances highly depends on distinct national policies. Unless the
international coordination and cooperation increases economic imbalances will continue to
occur and will lead to economic crises when reaching an unsustainable level.
