_001.jpg)
Orthodox theory focuses on the reallocation of real resources through trade and ignores the financial and balance sheet aspects of trade. However, global imbalances not only lead to an unsustainable buildup in external debt but also lead to a buildup in domestic debt, especially private sector debt.
Since the 2008 financial crisis, more attention has been paid to debt in systemically important institutions and in aggregate classes of borrowing. However, how much do we know about the kind of debt that burdens the most vulnerable Americans?
Has the allocation of credit to consumer spending hurt the long term prospects of emerging market economies?
Chris Miller asks how China's debt driven growth model fits into the larger history of developing states and if it can escape the pitfalls that ensnared others.
