Why Are Global Current Account Imbalances Persistent? Saving Gluts, Safe Assets, Savings Suppression, Triffin and Lucas

Deep End Era. Engineering with Sankalp · Oct 29, 2026 · 1h 7m

Every introductory economics textbook teaches that trade deficits are self-correcting, and that capital should flow from capital-rich advanced economies to capital-scarce developing nations. In the real world, the United States has run a current account deficit every single year since 1982 (except 1991), absorbing trillions of dollars of net capital inflows from the rest of the world. We build the theory and history of persistent global imbalances from first principles: the Saving-Minus-Investment identity, the Lucas Paradox, Bernanke's Global Saving Glut, Caballero-Farhi-Gourinchas safe…