This note intends to examine a part of the literature on the causes of global imbalances. Most analyses focus on the idea that the cause of the imbalance is related to the "global saving glut". The "saving glut" would be a direct result of policies deliberately adopted by some emerging economies in recent years, particularly in China. In contrast to the savings glut thesis, this study raises the hypothesis that the causes of the imbalances are in the financial arrangement which was triggered after the end of the Bretton Woods agreements in 1971 and exacerbated in the last two decades. Under the so-called financial globalization, this arrangement promoted a reckless boom in assets and an excessive expansion of credit with negative consequences on the real economy, which were embodied in the 2008 financial crisis. It will be shown further that such consequences become more evident when analyzing gross flows of capital instead of net flows.
Global economic crisis; Global imbalances; Financialization
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