Global Imbalances And The Financial Crisis

Author : Steven Vincent Dunaway
Publisher : Council on Foreign Relations
Page : 56 pages
File Size : 41,9 Mb
Release : 2009
Category : Business & Economics
ISBN : 9780876094280

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Global Imbalances and the Financial Crisis by Steven Vincent Dunaway Pdf

Crafting stimulus packages and financial bailouts to address immediate problems has for many reasons been a priority for policymakers. In this Council Special Report, however, Steven Dunaway argues that policymakers must go beyond these steps and tackle one of the root causes of today's crisis: imbalances between savings and investment in major countries. The report analyzes the nature of these imbalances, which occur when some countries, such as the United States, run large current account (essentially trade) deficits while others, such as China, maintain large surpluses. Dunaway identifies three features of the international financial system that have allowed the imbalances to persist, features that involve both floating and managed exchange rates as well as the issuance of reserve assets. In particular, he notes that the United States' status as an issuer of such assets has enabled it to finance a current account deficit. The report then prescribes a variety of steps to address global imbalances. Beyond stimulus packages around the world, it urges measures to raise savings (principally government savings) in the United States, reform labor and product markets in Europe and Japan to increase competition and flexibility, and boost domestic consumption in China. Finally, the report advocates improving International Monetary Fund (IMF) surveillance of member states' economic policies by reducing the role of the Fund's executive board and depoliticizing the selection of its senior management.

Author : Andreas Steiner
Publisher : Elsevier
Page : 204 pages
File Size : 53,9 Mb
Release : 2016-07-25
Category : Business & Economics
ISBN : 9780128104033

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Global Imbalances, Financial Crises, and Central Bank Policies by Andreas Steiner Pdf

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

Author : Alan Taylor
Publisher : International Monetary Fund
Page : 18 pages
File Size : 48,9 Mb
Release : 2013-12-20
Category : Business & Economics
ISBN : 9781484322857

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External Imbalances and Financial Crises by Alan Taylor Pdf

Consider two views of the global financial crisis. One view looks across the border: it blames external imbalances, the unprecedented current account deficits and surpluses in recent years. Another view looks within the border: it faults domestic financial systems where risks originated in excessive credit booms. We can use the lens of macroeconomic and financial history to confront these dueling hypotheses with evidence. The credit boom explanation is the most plausible predictor of crises since the late nineteenth century; global imbalances have only a weak correlation with financial distress compared to indicators drawn from the financial system itself.

Author : Mr. Philip R. Lane,Mr. Gian-Maria Milesi-Ferretti
Publisher : International Monetary Fund
Page : 45 pages
File Size : 52,9 Mb
Release : 2014-08-12
Category : Business & Economics
ISBN : 9781498363617

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Global Imbalances and External Adjustment after the Crisis by Mr. Philip R. Lane,Mr. Gian-Maria Milesi-Ferretti Pdf

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.

Author : Erlend Nier,Ouarda Merrouche
Publisher : International Monetary Fund
Page : 64 pages
File Size : 50,7 Mb
Release : 2010-11-01
Category : Business & Economics
ISBN : 9781455210725

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What Caused the Global Financial Crisis by Erlend Nier,Ouarda Merrouche Pdf

This paper investigates empirically the drivers of financial imbalances ahead of the global financial crisis. Three factors may have contributed to the build-up of financial imbalances: (i) rising global imbalances (capital flows), (ii) monetary policy that might have been too loose, (iii) inadequate supervision and regulation. Panel data regressions are performed for OECD countries from 1999 to 2007, so as to shed light on the relative importance of these factors, as well as the extent to which these factors might have interacted in fuelling the build-up. We find that the build-up of financial imbalances was driven by capital inflows and an associated compression of the spread between long and short rates. The effect of capital inflows on the build-up is amplified where the supervisory and regulatory environment was relatively weak. We find that, by contrast, differences in monetary policy cannot account for differences across countries in the build-up of financial imbalances ahead of the crisis.

Author : Alan M. Taylor
Publisher : Unknown
Page : 0 pages
File Size : 53,9 Mb
Release : 2012
Category : Business cycles
ISBN : OCLC:820958295

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External Imbalances and Financial Crises by Alan M. Taylor Pdf

In broad perspective, there have been essentially two competing views of the global financial crisis, albeit there are some complementarities among them. One view looks across the border: it mainly blames external imbalances, the large-scale mix of unprecedented pattern current account deficits and surpluses which entailed massive and growing net and gross international financial flows in the last decade. The alternative view looks within the border: it finds more fault in the domestic arena of the afflicted countries, attributing the problems to financial systems where risks originated in excessive credit booms in local banks. This paper uses the lens of macroeconomic and financial history to confront these dueling hypotheses with evidence. Of the two, the credit boom explanation stands out as the most plausible predictor of financial crises since the dawn of modern finance capitalism in the late nineteenth century. Historically, we find that global imbalances are not as important as a factor in financial crises as is often perceived, and they have much less correlation with subsequent episodes of financial distress compared to direct indicators like credit drawn from the financial system itself -- National Bureau of Economic Research web site.

Author : Mr.Francesco Strobbe,Mr.Gian Milesi-Ferretti,Ms.Natalia T. Tamirisa
Publisher : International Monetary Fund
Page : 56 pages
File Size : 55,8 Mb
Release : 2010-11-01
Category : Business & Economics
ISBN : 9781455209576

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Bilateral Financial Linkages and Global Imbalances by Mr.Francesco Strobbe,Mr.Gian Milesi-Ferretti,Ms.Natalia T. Tamirisa Pdf

We present a novel and comprehensive dataset of bilateral gross and net external positions in various financial instruments for the main advanced and emerging economies and regions, designed to improve our understanding of cross-border financial linkages. The data show no strong correspondence between country or region pairs with the largest gross versus net external positions, and the importance of international financial centers, including offshore centers, in intermediating financial flows. We also highlight some important data gaps in completing a network of cross-border holdings, related to the limited available information on the size and geographical pattern of external claims and liabilities of offshore centers, oil exporters, and other mostly emerging markets.

Author : Jacques Mazier
Publisher : Routledge
Page : 267 pages
File Size : 47,8 Mb
Release : 2020-05-07
Category : Business & Economics
ISBN : 9780429795077

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Global Imbalances and Financial Capitalism by Jacques Mazier Pdf

The past few decades have witnessed the emergence of economic imbalances at the world level and within the euro zone. The failure of mainstream economics to accurately predict financial crises, or model the effects of finance-led growth, highlights the need for alternative frameworks. A key text, Global Imbalances and Financial Capitalism: Stock-Flow-Consistent Modelling demonstrates that Stock-Flow-Consistent models are well adapted to study this growth regime due to their ability to analyse the real and financial sides of the economy in an integrated way. This approach is combined with an analysis of exchange rate misalignments using the Fundamental Equilibrium Exchange Rate (FEER) methodology, which serves to give a synthetic view of international imbalances. Together, these models describe how global and regional imbalances are created, as well as suggest appropriate tools through which they may be reduced. The book also considers alternative economic policies in the euro zone (international risk sharing, fiscal federalism, eurobonds, European investments, a multispeed euro zone) alongside alternative monetary policies. In particular, it examines the possibilities of using SDR (Special Drawing Rights) as a reserve asset to be issued to fight a global recession, to support the development of low-income countries, or as an anchor to improve global monetary stability. This text will be of interest to students, scholars, and researchers of economic theory and international monetary economics. It will also appeal to professional organisations who supervise international relations.

Author : Joseph P. Joyce
Publisher : Cambridge University Press
Page : 263 pages
File Size : 47,9 Mb
Release : 2013
Category : Business & Economics
ISBN : 9780521874175

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The IMF and Global Financial Crises by Joseph P. Joyce Pdf

Joyce traces the IMF's actions to promote international financial stability from the Bretton Woods era through the recent recession.

Author : Yilmaz Akyuz
Publisher : Unknown
Page : 190 pages
File Size : 44,8 Mb
Release : 2012
Category : Developing countries
ISBN : 812504793X

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Financial Crisis and Global Imbalances by Yilmaz Akyuz Pdf

Author : Ariane Hillig
Publisher : diplom.de
Page : 83 pages
File Size : 55,6 Mb
Release : 2014-03-10
Category : Business & Economics
ISBN : 9783842838369

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Causes and Consequences of Economic Imbalances: Comparison of US-Asia and Europe by Ariane Hillig Pdf

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. [...]

Author : Yılmaz Akyüz,South Centre (Independent Commission of the South on Development Issues)
Publisher : Unknown
Page : 190 pages
File Size : 50,9 Mb
Release : 2012
Category : Developing countries
ISBN : 9291620378

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Financial Crisis and Global Imbalances by Yılmaz Akyüz,South Centre (Independent Commission of the South on Development Issues) Pdf

Author : Olivier J. Blanchard,Gian Maria Milesi-Ferretti
Publisher : INTERNATIONAL MONETARY FUND
Page : 32 pages
File Size : 50,6 Mb
Release : 2009-12-22
Category : Electronic
ISBN : 1462333389

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Global Imbalances: In Midstream? by Olivier J. Blanchard,Gian Maria Milesi-Ferretti Pdf

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.

Author : Richard A. Ile,Mervyn K. Lewis
Publisher : Edward Elgar Publishing
Page : 309 pages
File Size : 53,9 Mb
Release : 2013-01-01
Category : Business & Economics
ISBN : 9781781951866

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Global Finance After the Crisis by Richard A. Ile,Mervyn K. Lewis Pdf

ÔRichard Iley and Mervyn Lewis have written an extremely useful book on the global economy since the Western financial crisis. Well-written, well-informed and easily accessible to non-economists, it offers much good sense about many questions, from the future of the renminbi to that of the United States. They wisely urge that, as ChinaÕs rise continues, the United States should engage with China rather than resist it. This is a book full of good judgement that deserves a wide readership.Õ Ð Martin Jacques, author, When China Rules the World: The End of the Western World and the Birth of a New Global Order ÔThe interplay between the macro-economic imbalances, notably in the relationship between the USA and China, and the more micro-economic shortcomings of the WestÕs financial systems, particularly the lax regulation, forms the centre-piece of this excellently written book. In the disputes about the relative culpability of China and the USA for current macro-economic problems, they tend to support the Chinese arguments, and give well-considered arguments for so doing. This book provides an excellent, clear, and at times provocative, assessment of the course of the macro-monetary problems of the world since the Ògreat recessionÓ struck.Õ Ð Charles A.E. Goodhart, London School of Economics, UK This thought-provoking book addresses challenging questions raised in light of the aftermath of the global financial crisis that saw an accelerated rise in the economic growth of China and other emerging market economies, while the US, Japan and Europe have laboured under the great recession. The authors examine global post-crisis reordering in a long-run context, identify five fundamental flaws in global bank business models and document the explosion of gross capital flows. They tackle difficult-to-answer lines of enquiry such as: can zero interest rates and quantitative easing lift the advanced world back to growth, or will they be dragged down by the overhang of debt? Might costs on savers, retirees and distortions to the pattern of global financing render zero rates counter-productive? What issues face the BRICs? Could ÔChina as number oneÕ see the renminbi soon challenge the dollar and the euro as a major international currency? Providing a detailed analysis of the post-crisis world and the issues posed by the rise of China and emerging market economies relative to developed countries, this book will prove a stimulating account for academics, students and researchers in the fields of economics, money, finance and banking, and world trade. Bank and market economists as well as policymakers based in central banks, governments and think-tanks will also find this book to be an invaluable reference tool.

Author : Ümit Hacioğlu,Hasan Dinçer
Publisher : Springer
Page : 659 pages
File Size : 47,7 Mb
Release : 2017-01-20
Category : Business & Economics
ISBN : 9783319470214

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Global Financial Crisis and Its Ramifications on Capital Markets by Ümit Hacioğlu,Hasan Dinçer Pdf

This book assesses the 2008-2009 financial crisis and its ramifications for the global economy from a multidisciplinary perspective. Current market conditions and systemic issues pose a risk to financial stability and sustained market access for emerging market borrowers. The volatile environment in the financial system became the source of major threats and some opportunities such as takeovers, mergers and acquisitions for international business operations. This volume is divided into six sections. The first evaluates the 2008-2009 Global Financial Crisis and its impacts on Global Economic Activity, examining the financial crisis in historical context, the economic slowdown, transmission of the crisis from advanced economies to emerging markets, and spillovers. The second section evaluates global imbalances, especially financial instability and the economic outlook for selected regional economies, while the third focuses on international financial institutions and fiscal policy applications. The fourth section analyzes the capital market mechanism, price fluctuations and global trade activity, while the fifth builds on new trends and business cycles to derive effective strategies and solutions for international entrepreneurship and business. In closing, the final section explores the road to economic recovery and stability by assessing the current outlook and fiscal strategies.