In the Great Rebalancing, Michael Pettis (2013) argues that existing global trade and capital imbalances must eventually balance out. The fundamental process generating economic crises, according to Pettis, is not the "animal spirits" described by Keynes but excessive deficits and surpluses of trade and current accounts. Large-scale economic imbalances, such as the trade deficit between China and the United States and European Union debt issue, can only be resolved with either policy-induced changes in trade flows between nations or, should there be lack of political willpower for change, painful systemic shocks to the global economy. Specifically, he predicts that little possibility remains for governments to resolve existing, widening imbalances before a severe, worldwide economic downturn - the world will almost inevitably undergo a "great rebalancing" that will cause a euro zone breakup and a "lost decade" for China...