Three stylized facts for achieving Growth

Accordingly with Michael Spence:

1) A 1% slowdown in advanced-country growth translates into roughly $350 billion of missing aggregate demand every year, in addition to the shortfall because of rebalancing in the US.

2) […] countries with current-account surpluses such as Germany, Japan and China must recognize that their own growth (and that of others) depends on reducing the global savings-investment imbalance, which will result in narrowing external deficits elsewhere. This needs to be done on a sustained basis following the withdrawal of extraordinary fiscal stimulus.

3) […] everyone must recognize their stake in restoring balanced advanced-country growth as much and as soon as possible in order to counter the ongoing shortfall in aggregate demand. After all, advanced countries account for about two-thirds of global GDP, so slow growth in these countries will inevitably impede global growth and truncate the growth potential of much of the developing world. This challenge, however, is very complex because deleveraging and rebalancing cannot be completed overnight.