Paul Davidson debates Peter Temin and David Vines in this INET working paper. I had criticized Temin and Vines before here and here. Although in general I agree with Paul, in my view, there is a problem with Keynes’ Bancor Plan kind of solution, that is the one that puts an emphasis on the need for surplus countries to carry the burden of external adjustment. It is really, in the world we live with a hegemonic currency, the role of the issuer of the international reserve currency to carry the burden. In other words, pace Mr. Trump, it is the US that needs to provide global demand, not China.
PS: China is losing reserves, faster than any one expected. But it’s worth remembering that they do still have significant current account surpluses, and that China faces no external constraint.