Potentially significant declines in surpluses between 2009 and 2025 from many of the major surplus groups (the major oil producers, China, Japan, Germany, Sweden), matched by significant improvements in the current account positions of many of the higher-deficit developed market economies, such as Greece, Spain, Portugal and, more modestly, the US. However, the basic pattern of surplus and deficit countries may not reverse completely over this period, although the surpluses and deficits may shrink.

The model (with all the obvious caveats) shows the US deficit at -3.2% of GDP by 2025; China's surplus declining to 3.3%, roughly where it was before the structural break higher in 2005; and Germany and Japan entering deficit territory. South and South-East Asia, whose demographics are favourable, also see significant pressure for stronger current accounts.

Changes in the EM and DM aggregate positions are modest (-1.1ppt for DM and -0.9ppt for EM), and the same is true for the BRICs as a bloc. This means that the model does not predict any significant shift in the picture of EM economies sending capital to the developed world, and by 2025 it still shows EM as a group potentially running a surplus and DM a deficit. (It may seem counterintuitive that the current accounts of both DM and EM can deteriorate as a percentage of GDP but EM GDP is rising much more rapidly.)

What does change is that the picture within the EM and DM blocs becomes more uniform. In particular, the fact that Germany, Japan and Canada may move into deficit, but that Brazil and India could join Russia and China in surplus as their 'prime savings' groups expand, means that the exercise envisages a world where all of the large EM countries move into surplus and all of the large DM economies into deficit over time, unlike today.

Eoin Treacy's view This makes a compelling argument for favouring the so-called "emerging markets" in one's long-term investment strategy.