Stephen Roach argues that behind most major financial crises—the Asian financial crisis, the US subprime mortgage crisis, and the European debt crisis—are unsustainable economic imbalances. With the future of global economic growth still in question, the outlook may depend critically on how the United States and Asia move to address them. Roach recommends that developing Asian nations consume more and strengthen the services side of their economies, while the United States should consume less and stop scapegoating the renminbi. Can Asia and the United States overcome the many structural challenges to fix their economic imbalances?

Stephen Roach is a senior lecturer at the Yale School of Management and a senior fellow at Yale University’s Jackson Institute of Global Affairs. He was formerly chairman of Morgan Stanley Asia and the firm’s chief economist for most of his 30-year career there. Prior to joining Morgan Stanley in 1982, Roach served on the research staff of the Federal Reserve Board and was also a research fellow at the Brookings Institution.

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