Global imbalances and the financial crisis

Resource Information

The work Global imbalances and the financial crisis represents a distinct intellectual or artistic creation found in European University Institute. This resource is a combination of several types including: Work, Language Material, Books.

Label

Global imbalances and the financial crisis

Statement of responsibility

Steven Dunaway

Creator

• Dunaway, Steven Vincent

Contributor

• Council on Foreign Relations, Maurice R. Greenberg Center for Geoeconomic Studies

Subject

• Balance of trade
• Balance of payments
• International Monetary Fund
• Saving and investment
• International finance

Language

eng

Summary

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

Member of

• CSR (New York, N.Y.), no. 44

Additional physical form

Also available online at the CFR website.

Cataloging source

IT-FiEUI

Illustrations

illustrations

Index

no index present

Literary form

non fiction

Nature of contents

bibliography

Series statement

Council special report / Council on Foreign Relations

Series volume

no. 44