The speech, titled “The Global Saving Glut and the U.S. Current Account Deficit, ” offered a novel explanation for the rapid rise of the U.S. trade deficit in the early 21st century.

Whether a current account deficit is unsustainable depends on the type of and the reason for capital inflows.

The reason for concern about India's widening current-account deficit is not that it heralds a financial crisis, but that it is a signal of how supply cannot keep pace with red-hot demand.