Laura Alfaro, Sebnem Kalemli-Ozcan, Vadym Volosovych, 29 October 2011

With all the focus on Europe, it is easy to ignore the argument that global imbalances remain a drag on economic recovery. This column decomposes international capital flows into public and private components and claims that upstream flows from emerging to advanced economies and global imbalances in general are the result of the same underlying factor.

Heleen Mees, 08 August 2011

As fears mount of another phase in the global crisis, this column points out that despite the growing uncertainty, US Treasury and German Bund yields have actually declined in recent weeks. The reason, it argues, is the global saving glut theory.

Claudio Borio, Piti Disyatat, 26 July 2011

Global imbalances loom large in G20 and IMF discussions, but are they to blame for the global crisis? This column argues that the emphasis on current-account imbalances is unhelpful and diverts attention from the monetary and financial factors that really sowed the seeds of the crisis.

Barry Eichengreen, 26 June 2011

Global imbalances remain a key issue for G20 leaders. This column evaluates the progress made by G20 leaders in the run up to their Cannes summit this November, concluding that the G20 process is unlikely to protect us from the risks posed by disorderly unwinding of imbalances.

Heleen Mees, 21 June 2011

With the US economy still faltering, some are suggesting it may be time for a third round of quantitative easing. This column explores the transmission mechanism of monetary policy and how it has broken down in recent years. It argues that, in this climate, the Fed would be wise to avoid another bond-buying programme.

Olaf Unteroberdoerster, Jade Vichyanond, Adil Mohommad, 12 June 2011

Persistent global imbalances are raising concerns about the sustainability of the global recovery and economic growth in general. This column argues that a proper appreciation of the influence of exchange rates and demand on global imbalances requires taking into account an important feature of Asia’s trade – cross-border supply chains or “vertical integration”.

Uri Dadush, Bennett Stancil, 09 May 2011

Between 2000 and 2009, developing countries added almost $5 trillion to their foreign-exchange reserves – a number deemed too high by many, prompting accusations of protectionism. But this column argues that developed countries are equally to blame – as well as failures in international coordination. It concludes that remedies therefore require action by both groups.

Paolo Angelini, Stefano Neri, Fabio Panetta, 23 May 2011

The global financial crisis has prompted an intense debate on the role of macroprudential policies in limiting the accumulation of risks and imbalances. Major economies have recently established new institutions, or strengthened existing ones, with a mandate to pursue financial stability. This column examines the effectiveness and consequences of macroprudential policies with a focus on their interaction with monetary policy.

Max Corden, 11 April 2011

CEPR Policy Insight No. 54 analyses the current global imbalances debate.

Max Corden, 11 April 2011

People critical of global imbalances often blame the surplus countries and their currency manipulation. This column introduces a Policy Insight that argues that the basic problem has been the inefficiency of the world’s financial sector, which led to unfruitful investment in the US rather than productive investment in emerging economies.

Yuqing Xing, 10 April 2011

What can the iPhone tell us about the trade imbalance between China and the US? This column argues that current trade statistics greatly inflate the value of China’s iPhone exports to the US, since China's value added accounts for only a very small portion of the Apple product's price. Given this, the renminbi’s appreciation would have little impact on the global demand for products assembled in China.

Michael Spence, 08 April 2011

Michael Spence of Stanford University talks to Viv Davies about growth prospects in the US and developing countries. He describes the current divergence between growth and employment in the US economy. They also discuss global imbalances, fiscal coordination in Europe, the global investment rate and the threat of rising oil prices to global growth. The interview was recorded in Washington DC in March 2011 at the IMF conference, ‘Macro and Growth Policies in the Wake of the Crisis’. [Also read the transcript.]

Robert Solow, 01 April 2011

Robert Solow of MIT talks to Viv Davies about discretionary fiscal policy, the fiscal multiplier and automatic stabilisers in light of the financial crisis. They also discuss growth prospects for the US, the importance of international coordination of fiscal policy in Europe, the need for a more sophisticated industrial policy and the issue of global imbalances. The interview was recorded in Washington DC in March 2011 at the IMF conference, ‘Macro and Growth Policies in the Wake of the Crisis’. [Also read the transcript]

Heleen Mees, 24 March 2011

Is US easy monetary policy in the early 2000s to blame for the global saving glut? This column argues that the Federal Reserve’s policy triggered the refinancing boom and ensuing spending spree, which spurred economic growth and savings in China. The prolonged decline in long-term interest rates in the mid-2000s is largely to blame for the housing boom in the US.

Uri Dadush, Vera Eidelman, 06 March 2011

Global imbalances and their effects on the global economy are much discussed. This column says that discussing global imbalances is popular because it is the easy way out. It says that policymakers should target the illness rather than the symptoms by reforming their domestic economies and focusing on sustainable growth.

Domingo Cavallo, Fernando Díaz, 17 February 2011

With growing inflation in China, policymakers are facing tough decisions. This column argues that if the government is to curb inflation without allowing for the deflation of the tradables, it should do so though sector focused policies. Monetary policy is already committed to the objective of preventing deflation of the tradables and to dampen the credit cycle that is behind asset bubbles.

Uri Dadush, Vera Eidelman, 20 December 2010

Today’s currency tensions are the result of a complex set of forces arising from the Great Recession. This column presents lessons from the break-up of the gold standard and of the fixed-rate dollar standard. While competitive devaluations are less likely today than is commonly feared, there is no room for complacency.

Luiz de Mello, Pier Carlo Padoan, Linda Fache Rousová, 12 December 2010

Are global imbalances sustainable? This column analyses nearly 160 current-account reversals across 101 countries between 1971 and 2007. It argues that with the right policy framework, external imbalances can be monitored and, to some extent, managed.

Uri Dadush, Shimelse Ali, 09 December 2010

If China appreciates its currency, who will gain and who will lose out? This column argues that the single greatest beneficiary from a gradual renminbi revaluation, accompanied by measures to stimulate demand, will be China itself. Ironically, the US, which has been leading the charge on renminbi appreciation, would likely be among the losers. Certainly, a very large one-off revaluation that disrupts China’s growth hurts everyone.

Venkatachalam Shunmugam, Debojyoti Dey, 03 December 2010

Politicians, public servants, and commentators have been queuing up in recent months to raise their concerns about global imbalances, particularly the China-US imbalance. This column argues that while the two economies may present opposing public stances, they are quietly playing a tango that neither can step out of.

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