The 29th Geneva Report on the World Economy assesses four major challenges currently confronting the global economy. First, global imbalances have re-emerged as a central issue, driven by China’s growing external surplus, in part reflecting its active industrial policy, and the US deficit associated with expanding public debt. The authors argue that imbalances, though rising, are not yet a cause for serious concern. Even so, greater support for domestic demand in China and fiscal consolidation in the United States would address key policy needs in these two economies while at the same time helping to shrink the imbalances […]