Eduardo Levy Yeyati, 30 September 2010

Total foreign exchange holdings are larger than ever, largely due to reserve accumulation by emerging and developing economies. This column investigates the driving forces behind the accumulation of foreign exchange reserves and finds that exchange-rate smoothing, rather than precautionary stockpiling, is the main driver.

Daniel Gros, 08 October 2010

With the US threatening to label China a “currency manipulator”, this column presents a plan to address global imbalances without risking a trade war. It proposes a “reciprocity” requirement – if the US can’t buy Chinese government bonds, then China can’t buy US bonds either.

Yiping Huang, 29 September 2010

How should policymakers deal with global imbalances? This column argues that a return to the Plaza Accord of the 1980s with an exclusive focus on the exchange rate could well dilute the G20’s other agendas and may not even work in practice. The best solution is instead to focus on structural reforms.

Anton Brender, Florence Pisani, 04 September 2010

Are low interest rates storing up more trouble for the future? This column argues that low interest rates have been necessary to sustain large current-account imbalances. With global imbalances unlikely to be redressed any time soon, low interest rates may be the best option for a while longer – but this policy is not without its risks.

Luiz de Mello, Pier Carlo Padoan, 01 August 2010

Global imbalances are firmly back on the policy agenda. This column examines evidence from past imbalances that suggests that the current-account reversals can be sizeable and the resulting disruption to capital flows could pose risks for the global recovery.

Barry Eichengreen, Peter Temin, 30 July 2010

The world economy is experiencing tensions arising from inflexible exchange rates – particularly the dollar-renminbi peg and the Eurozone. Drawing on lessons from the gold standard, this column points out that an international monetary system is a system – nations’ policies have spillovers. Now, as in the 1930s, surplus nations’ refusals to increase spending force deficit countries to contract. Keynes drew this lesson from the Great Depression, which is why he wanted measures to deal with chronic surplus countries. Sixty-plus years later, we seem to have forgotten his point.

Luis Servén, Ha Nguyen, 29 July 2010

Global imbalances have taken centre stage in the debate on the global economic outlook. This column surveys the debate over the roots of global imbalances and argues that asymmetries in the supply and demand for assets, rather than goods, are responsible. With this interpretation, global imbalances are unlikely to go away any time soon.

Hans-Werner Sinn, 15 July 2010

Some Americans are calling on Germany to pursue expansionary fiscal policy. This column says that the German government should ignore US criticism of its savings measures.

Mona Haddad , Cosimo Pancaro, 08 July 2010

Current discussions over the value of China’s currency demonstrate the controversy that exchange-rate policy is capable of igniting. This column suggests that while a managed real undervaluation can enhance domestic competitiveness, it is difficult to sustain in the post-crisis environment – both economically and politically. It says that a real undervaluation works only for low-income countries, and only in the medium term.

Willem Thorbecke, 06 July 2010

Will China’s decision to ditch the dollar peg help rebalance the global economy? This column argues that China’s action may facilitate a concerted appreciation in Factory Asia, helping the region redirect production away from western markets and towards domestic consumers.

Stijn Claessens, Simon Evenett, Bernard Hoekman, 23 June 2010

This Vox eBook aims to provide policymakers and their advisers with up-to-date, comprehensive analyses of the central facets of global economic imbalances and to identify and evaluate potential national and systemic responses to this challenge.

Simon Evenett, Stijn Claessens, Bernard Hoekman, 23 June 2010

The global balances are a thorn in the side of the G20. This column launches a new eBook with the aim of providing policymakers and their advisers with up-to-date, comprehensive analyses of the central facets of global economic imbalances and to identify and evaluate potential national and systemic responses to this challenge.

Barry Eichengreen, Andrew Rose, 21 June 2010

China’s announcement of greater renminbi flexibility was welcomed by US and European leaders. This column discusses new empirical research on what happens to economies when they exit exchange rate pegs that are resisting appreciation. Data from 27 cases suggest that growth slows but only modestly, and there is no evidence of economic and financial damage as a result – certainly nothing like the fears that China's next decade could look like Japan’s lost decade.

Kati Suominen, 14 June 2010

Did global imbalances cause the global crisis? This column summarises the variety of explanations of the relationship between imbalances and the crisis. While the debate continues, it suggests that, as a matter of prudence, policies to contain global imbalances may still be warranted even if they did not trigger the crisis.

Edward Barbier, 03 June 2010

Nearly one-sixth of the more than $3 trillion in fiscal stimulus spent in 2008 and 2009 was allocated to green spending. But this column argues that without correcting existing market and policy distortions, the “greening” of the world economy will be short-lived. Now more than ever, the world needs a global green New Deal – and it needs the G20 to lead the way.

Ambrogio Cesa-Bianchi, M. Hashem Pesaran, Alessandro Rebucci, Cesar Tamayo, TengTeng Xu, 20 May 2010

What would a Chinese currency revaluation mean for Latin America? This column argues that a revaluation is no silver bullet. It will not solve Latin America’s problems with excessive capital inflows, exchange-rate appreciation, and loss of competitiveness. In fact it poses serious risks. A 10% revaluation of the renminbi could reduce growth in Latin America by 0.3%.

Philip Levy, 16 April 2010

Many US analysts argue that China’s currency is undervalued and that its policy significantly impedes global macroeconomic rebalancing. This column outlines the possible policy responses available to the US. While multilateral policies are slower, they are less likely than unilateral policies to trigger a negative political response. But first the US needs to establish a principled basis for action.

Hans Genberg, Wenlang Zhang, 25 April 2010

Would an increase in Chinese domestic demand meaningfully reduce global imbalances and improve US and European employment prospects? This column says that Chinese policy has a relatively small impact on developed economies' macroeconomic circumstances. It estimates that major reduction in Chinese saving would improve US employment by less than one quarter of a percentage point.

Arvind Subramanian, 24 April 2010

Global imbalances have been central to the recent debate of China’s exchange-rate policy and its effect on US jobs. This column argues that global imbalances are not going away. The policy solution is clear. Coordination is needed among emerging economies on managing capital flows and exchange rates. Swift and substantially policy from China can help bring this about.

Fred Bergsten, 16 April 2010

C Fred Bergsten is one of several commentators calling for action against China’s exchange-rate policy. In this column, he outlines a three-part multilateral action plan to force China to allow the renminbi to appreciate: label China a “currency manipulator”, seek a special IMF consultation, and request a WTO dispute settlement panel.

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