Download or read book Global Imbalances written by Mr.Gian Milesi-Ferretti and published by INTERNATIONAL MONETARY FUND. This book was released on 2009-12-22 with total page 0 pages. Available in PDF, EPUB and Kindle. Book excerpt: This chapter analyses various reasons for global imbalances and ways to tackle these issues. Current account balances reflect a plethora of macroeconomic and financial mechanisms. The overall assessment is that the pre-crisis policy advice and the conclusions from the Multilateral Consultations still largely hold. Namely, it is important to address domestic and systemic distortions. It is recommended to increase private and public US saving. The private part has largely taken place. The public part will have to take place over time. This will be good for the United States and help global rebalancing. In the fallout from the financial crisis, the adjustment process of global imbalances has started. However, stopping in midstream is dangerous—while imbalances are smaller than they used to be, the world economy is fragile. Failure to act on the remaining domestic and systemic distortions that caused imbalances would threaten the nascent recovery.
Download or read book Global Imbalances In Midstream written by Olivier J. Blanchard and published by INTERNATIONAL MONETARY FUND. This book was released on 2009-12-22 with total page 32 pages. Available in PDF, EPUB and Kindle. Book excerpt: Before the crisis, there were strong arguments for reducing global imbalances. As a result of the crisis, there have been significant changes in saving and investment patterns across the world and imbalances have narrowed considerably. Does this mean that imbalances are a problem of the past? Hardly. The paper argues that there is an urgent need to implement policy changes to address the remaining domestic and international distortions that are a key cause of imbalances. Failure to do so could result in the world economy being stuck in "midstream," threatening the sustainability of the recovery.
Download or read book Causes and Consequences of Economic Imbalances Comparison of US Asia and Europe written by Ariane Hillig and published by diplom.de. This book was released on 2014-03-10 with total page 87 pages. Available in PDF, EPUB and Kindle. Book excerpt: Introduction: Problem and Objective: ‘The economic health of every country is a proper matter of concern to all its neighbors, near and far.’ Franklin D. Roosevelt. This quotation reflects the importance of economic imbalances for the global economic environment. As seen in the past, huge economic imbalances of emerging countries have resulted in a number of crises such as the Mexican tequila crisis, Asian crisis or the Argentine crisis. In the past ten years, major economic imbalances have been concentrating among a small number of countries. The main deficit countries such as USA and Spain have been mirrored by current account surplus countries in Asia, Middle East as well as in Europe. Already in 2004, the persistency and growing size of the global imbalances have led to the speculation about a disorderly unwinding in the future. In 2007, the global financial crisis started in USA and rapidly spread across major economies due to the high financial integration. Out of the financial crisis, the current eurozone crisis developed which is posing a major threat to the global economy. ‘Global imbalances can be defined as widening external positions of systemically important economies that reflect distortions or entail risks for the global economy.’ External positions are shown in the current accounts which show huge deficits or surpluses caused by distortions or/and pose a risk for the global economy. Distortions can arise due to policy decisions taken by the public or private sector. The current account development of a single European country does not fit the definition, but a country’s possible contagion effect in case of a crisis and the overall European development is systemically important and poses a significant risk to the global economy. Hence, in the author’s point-of-view the current account development from US-Asia as well as the intra-euro economic imbalances can be considered as global imbalances. [...]
Download or read book Historical Perspective on Global Imbalances written by Michael D. Bordo and published by . This book was released on 2005 with total page 44 pages. Available in PDF, EPUB and Kindle. Book excerpt: This paper takes an historical perspectives approach to the current episode of global imbalances. I consider four historical episodes which may give some indications as to whether the adjustment to U.S. current account deficit will lead to a 'benign' or 'gloomy' outlook. The episodes are: the transfer of capital in the earlier era of globalization the late nineteenth century; the interwar gold exchange standard; Bretton Woods; and the 1977-79 dollar crisis. I conclude that adjustment in earlier era of globalization has more resonance for the current imbalance than the other scenarios.
Download or read book Global Imbalances written by and published by . This book was released on 2022 with total page 0 pages. Available in PDF, EPUB and Kindle. Book excerpt: Global imbalances, as measured by current account surpluses and deficits, had been on a narrowing path for several years, before widening in 2020 and 2021. While there is nothing wrong per se, excessive current account imbalances, if unaddressed, might pose serious risks to the global economy. These Brief analyses the recent dynamics in global imbalances in the context of the COVID-19 pandemic and discusses the possible effects of the ongoing Russia' war in Ukraine. It notes that while the recent global imbalances widening appears to reflect mostly transitory shocks, uncertainty and downside risks to the global outlook remain exceptionally high. It also underlines that while Emerging Markets Economies' macroeconomic fundamentals appear more resilient to the current monetary tightening, weaknesses remain. The Brief also considers how climate change as a systemic risk could jeopardise the fragile equilibrium of macroeconomic fundamentals. Finally, the Brief presents possible macroeconomic and structural policy options to reduce excess current account imbalances in a growth-friendly manner and to prevent or cushion possible risks.
Download or read book Global Imbalances and Petrodollars written by Rabah Arezki and published by International Monetary Fund. This book was released on 2009-04 with total page 28 pages. Available in PDF, EPUB and Kindle. Book excerpt: We analyze the European Central Bank's (ECB's) response to the global financial crisis. Our results suggest that even during the crisis, the core part of ECB's monetary policy transmission-from policy rates to market rates-has continued to operate, but at a decreased efficiency. We also find some evidence that the ECB's non-standard measures, namely the lengthening of the maturity of monetary policy operations and the provision of funds at the fixed rate, reduced money market term spreads, facilitating the pass-through from policy to market rates. Furthermore, the results imply that the substantial increase in the ECB's balance sheet may have contributed to a reduction in government bond term spreads.
Download or read book Global Imbalances After the Financial Crisis written by Jens Boysen-Hogrefe and published by . This book was released on 2009 with total page pages. Available in PDF, EPUB and Kindle. Book excerpt:
Download or read book Reducing Risks from Global Imbalances written by Committee for Economic Development. Research and Policy Committee and published by . This book was released on 2007 with total page 65 pages. Available in PDF, EPUB and Kindle. Book excerpt: "Risks from global trade and financial "imbalances" and recommendations on how to reduce their threat to the world economy are examined in Reducing Risks from Global Imbalances, a report released today by Committee for Economic Development (CED), a business-led policy group"--PR Newswire.
Download or read book Twenty Five Years of Global Imbalances written by Maurice Obstfeld and published by . This book was released on 2018 with total page 17 pages. Available in PDF, EPUB and Kindle. Book excerpt: As international capital markets expanded in breadth and depth after the middle 1990s, global current account imbalances also expanded markedly. Some have linked the origin of the subsequent Global Financial Crisis (GFC) to these global imbalances. This essay proposes answers to four questions about the recent history of global imbalances. Why did global imbalances expand after the mid-1990s? What circumstances and concomitant factors provide clues about the origins of the GFC? If one accepts that a mono-causal story about the GFC based on global imbalances is inaccurate, how should one view the potential threats from excessive global imbalances today? And finally, what policy implications follow?
Download or read book Global Imbalances and External Adjustment after the Crisis written by Mr.Philip R. Lane and published by International Monetary Fund. This book was released on 2014-08-12 with total page 45 pages. Available in PDF, EPUB and Kindle. Book excerpt: This paper has two objectives. First, it reviews the recent dynamics of global imbalances (both “flow” and “stock” imbalances), with a special focus on the shifting position of Latin America in the global distribution. Second, it examines the cross-country variation in external adjustment over 2008-2012. In particular, it shows how pre-crisis external imbalances have strong predictive power for post-crisis macroeconomic outcomes, allowing for variation across different exchange rate regimes. We emphasize that the bulk of external adjustment has taken the form of “expenditure reduction”, with “expenditure switching” only playing a limited role.
Download or read book External Adjustment written by Maurice Obstfeld and published by . This book was released on 2004 with total page 64 pages. Available in PDF, EPUB and Kindle. Book excerpt: "Gross stocks of foreign assets have increased rapidly relative to national outputs since 1990, and the short-run capital gains and losses on those assets can amount to significant fractions of GDP. These fluctuations in asset values render the national income and product account measure of the current account balance increasingly inadequate as a summary of the change in a country's net foreign assets. Nonetheless, unusually large current account imbalances, especially deficits, should remain high on policymakers' list of concerns, even for the richer and less credit-constrained countries. Extreme imbalances signal the need for large and perhaps abrupt real exchange rate changes in the future, changes that might have undesired political and financial consequences given the incompleteness of domestic and international asset markets. Furthermore, of the two sources of the change in net foreign assets -- the current account and the capital gain on the net foreign asset position -- the former is better understood and more amenable to policy influence. Systematic government attempts to manipulate international asset values in order to change the net foreign asset position could have a destabilizing effect on market expectations"--NBER website
Download or read book Global Imbalances Financial Crises and Central Bank Policies written by Andreas Steiner and published by Elsevier. This book was released on 2016-07-25 with total page 206 pages. Available in PDF, EPUB and Kindle. Book excerpt: Global Imbalances, Financial Crises, and Central Bank Policies assesses the relationships between global imbalances, financial crises, and central bank policies, with a specific focus on their reserves. The book contains a strictly international perspective with an analysis based on empirical research that enables the reader to develop an analytical model that emphasizes interactions among individual central banks. With this innovative approach, the book develops a new method for defining an optimal demand for reserves. In addition, the book describes implications for financial reforms that might ultimately be more important than its empirical findings. Presents a systematic account of the relationship between the build-up of reserves and central bank policies Emphasizes a global view of currency reserves, which is usually ignored in analyses of their effect Includes datasets as well as all illustrations and figures in online ancillary materials
Download or read book Monetary Transmission of Global Imbalances in Asian Countries written by Mr.Il Houng Lee and published by International Monetary Fund. This book was released on 2010-09-01 with total page 28 pages. Available in PDF, EPUB and Kindle. Book excerpt: The paper explores the linkages between the global and domestic monetary gaps, and estimates the effects of monetary gaps on output growth, inflation, and net saving rates using panel data for 20 Asian countries for 1980-2008. We find a significant pass-through of the global monetary gap to domestic monetary gaps, which in turn affect output growth and inflation, in individual emerging market and developing countries in Asia. Notably, we provide evidence that the global monetary condition is partly responsible for the current account surplus in Asia. We also draw implications for monetary policy coordination for global rebalancing.
Download or read book Current Account Imbalances written by Anna Ivanova and published by International Monetary Fund. This book was released on 2012-02-01 with total page 35 pages. Available in PDF, EPUB and Kindle. Book excerpt: The discussion of global and regional imbalances has put the spotlight on the possible link between current accounts and structural policies. Drawing on standard empirical current account models, the paper finds that the commonly recommended structural factors cannot explain the widening of imbalances prior to the 2008 - 09 crisis. That said, structural factors do help explain some part of long-standing cross-country differences in the current account levels. In particular, countries with stricter credit market regulation, higher taxes on businesses, lower minimum wage (in particular,in slow growing economies) and generous unemployment benefits tend to have higher current account balances than others.
Download or read book Sustainability of External Imbalances written by Angélique Herzberg and published by Springer. This book was released on 2014-08-28 with total page 336 pages. Available in PDF, EPUB and Kindle. Book excerpt: Since the mid-1990s, sustainability of large and persistent current account positions have been attracting much attention from policy makers and economists alike. Alongside global imbalances, sustainability of imbalances within the euro area, which started widening shortly after the introduction of the euro, raised much concern. While there exists a large body of theoretical and empirical literature on sustainability of external imbalances, a systematic survey has been lacking so far. Angélique Herzberg fills this gap by examining a broad range of established sustainability measures concerning their applicability to the various global and intra-euro imbalances of the recent past. Furthermore, the author examines the existence of feedback effects from an economy ́s net international investment position to its trade balance.
Download or read book Global Rebalancing written by Yongzheng Yang and published by International Monetary Fund. This book was released on 2011-10-01 with total page 33 pages. Available in PDF, EPUB and Kindle. Book excerpt: While global rebalancing will mainly involve structural realignment among major advanced and emerging market economies, it could have significant impact on low-income countries (LICs). Simulations using a global general equilibrium model show that a more balanced global economy would tend to improve the current account balance in LICs with limited impact on domestic output. However, there could be adverse terms of trade effects on some LICs as the prices of manufactured goods rise. On the other hand, such prices increases could provide an impetus to export diversification in many LICs, raising growth in the long run. The output and terms of trade effects would be significantly amplified if structural adjustment is impeded by factor immobility and other rigidities.
Download or read book Income Inequality and Current Account Imbalances written by Mr.Michael Kumhof and published by International Monetary Fund. This book was released on 2012-01-01 with total page 44 pages. Available in PDF, EPUB and Kindle. Book excerpt: This paper studies the empirical and theoretical link between increases in income inequality and increases in current account deficits. Cross-sectional econometric evidence shows that higher top income shares, and also financial liberalization, which is a common policy response to increases in income inequality, are associated with substantially larger external deficits. To study this mechanism we develop a DSGE model that features workers whose income share declines at the expense of investors. Loans to workers from domestic and foreign investors support aggregate demand and result in current account deficits. Financial liberalization helps workers smooth consumption, but at the cost of higher household debt and larger current account deficits. In emerging markets, workers cannot borrow from investors, who instead deploy their surplus funds abroad, leading to current account surpluses instead of deficits.
