However, there are a number of inconvenient facts that stand in
the way of this type of convenient thinking. For one, given the sheer severity of the global
crisis, there is a great deal of uncertainty about global recovery prospects. For another,
there are serious doubts whether running current account surpluses on a sustained basis
serves the region’s own self-interest. In theory, running a surplus over an extended period
of time is perfectly consistent with maximizing growth and welfare. In particular, economic
theory suggests that both rich and poor countries will benefit if capital flows from capitalabundant
rich countries where the marginal returns to capital are low to capital-deficient
poor countries where the returns are high. Therefore, there are solid grounds for
questioning the logic or optimality of massive flood of capital flowing from developing Asia
to the much richer America.