IMF Study On Income Inequality Growth And Negative Current Account Growth Current

This post is on research conducted by the IMF that shows a relationship between the growth in income inequality and negative current account balance growth. Governments do not respond directly to the causes of income inequality. Instead, they reduce the cost of borrowing so that the bottom 95% can take on more debt to support consumption. Some of the borrowing comes from internal sources, but it is supplemented by borrowing from abroad, which produces the fall in the current account. Global imbalances are the result.