The world has thus become imbalanced in a way that markets cannot fix easily: much of my tenure at the International Monetary Fund was spent warning not about finance but about global trade imbalances. The two are linked, for the global trade surpluses produced by the exporters search out countries with weak policies that are disposed to spend but also have the credibility to borrow to finance the spending—at least for a while. In the 1990s, developing countries, especially those in Latin America and East Asia, spent their way into distress. How and why this happened is what I turn to next.
observed pattern: exporters find new markets with weak policies, marked with penchant for spending and creditworthiness to borrow to fund it, until it can't, often crippling the importing market's economy). all caused by and exacerbates global trade imbalance.
