Why is so much capital flowing uphill, from the poor countries to the rich ones, instead of from the rich to the poor? The question is of great practical importance. The answer should suggest both how long the present pattern of global capital flows or current account “imbalances” is likely to last and how it may end.

What, then, is happening to capital flows to and from the emerging market economies? What drives these trends? What role does policy play? Do the trends matter? How should these trends be dealt with?