Real effective exchange rates (REERs) are widely used to gauge competitiveness. Yet conventional REERs, based on gross trade flows and consumer price indexes (CPIs), are not well suited to that role when imports are used to produce exports – i.e., with vertical specialisation in trade.
Value-added exchange rates
Rudolfs Bems, Robert Johnson, 6 December 2012
Global trade in services: Fear, facts, and offshoring
J. Bradford Jensen, 19 November 2012
Should the US, or indeed the EU, Japan, Canada, or Australia, fear increased trade in services? As the ‘Really Good Friends of Services’ discussions gain momentum in Geneva, it seems an important time to ask1.
Slow but steady? External adjustment within the Eurozone starts working
Marco Buti, Alessandro Turrini, 12 November 2012
There is a general perception in the policy debate that Eurozone imbalances are not adjusting. Deficit countries are stuck in an unsustainable equilibrium and surplus countries’ growth is mostly based on exports. The most pressing concern is that a symmetric evolution of competitiveness between surplus and deficit countries is needed for rebalancing to be complete and durable.
Global Rebalancing 2.0
Linda Lim, Ronald U Mendoza , 24 September 2012
The discussion on global rebalancing is at a crossroads, and much of what will shape policy options moving forward will have to be taken up in roundtables that include more countries than the two usual suspects, China and the US.
Why do Chinese households save so much?
Raman Ahmed, Heleen Mees, 28 August 2012
China’s monumental savings rate is a popular topic of for policy discussion.1 It has been blamed for the global financial crisis, currency wars (Portes 2010), and the ensuing Great Recession (Mees 2012). But what explains the high savings rate?
China’s strong domestic demand has reduced its trade surplus
Françoise Lemoine, Deniz Ünal, 19 July 2012
Between 2005 and 2007 China’s accumulated huge trade surpluses and played a major part in the rise of global imbalances. The US and China have repeatedly come in conflict over the imbalance in bilateral trade.
China: No longer the villain
Marco Annunziata, 21 April 2012
While concerns about Spain and, to a lesser extent, Italy have again taken centre-stage, a number of experts and market participants are almost as worried and sceptical about China as they are about the Eurozone.
The determinants and long-term projections of saving rates in emerging Asia
Charles Yuji Horioka, Akiko Terada-Hagiwara, 28 November 2011
Governor Ben S Bernanke of the Federal Reserve Board has repeatedly warned of the dangers of global imbalances and a global saving glut and has asserted that the economies of emerging Asia have contributed to both global imbalances and the global saving glut by shifting from current-account deficits to current-account surpluses (Bernanke 2005, 2010, 2011).
Laura Alfaro, Sebnem Kalemli-Ozcan, Vadym Volosovych, 29 October 2011
The key policy concern preceding the 2007–09 crisis was global imbalances. The extensive policy intervention in the aftermath of the crisis did not bring any resolution to the issue.
The global saving glut will hold bond yields down
Heleen Mees, 8 August 2011
The saving glut theory has gone out of fashion – unjustly so. In spite of twin financial crises looming on either side of the Atlantic, US Treasury and German Bund yields have declined in recent weeks. This can be explained by not only the dismal economic growth of the US economy in the first semester of 2011, but also the unrelenting build-up in total debt securities outstanding.
- Fiscal consolidation: At what speed?Blanchard, Leigh
- Public debt and economic growth, one more timePanizza, Presbitero
- Escaping liquidity traps: Lessons from the UK’s 1930s escapeCrafts
- The lessons of the North Atlantic crisis for economic theory and policyStiglitz
- Rethinking macroeconomic policyBlanchard
- A tale of two depressions: What do the new data tell us? February 2010 updateEichengreen, O’Rourke
- Educated in America: College graduates and high school dropoutsHeckman, LaFontaine
- Eurozone breakup would trigger the mother of all financial crisesEichengreen
- Debt, deleveraging, and the liquidity trap: A new modelKrugman
- Panic-driven austerity in the Eurozone and its implicationsDe Grauwe, Ji
Reichlin, Baldwin, 14 April 2013
Reichlin, Turner, Woodford
CEPR Policy Research
- The "Greatest" Carry Trade Ever? Understanding Eurozone Bank RisksAcharya, Steffen
- Political Credit Cycles: The Case of the Euro ZoneFernández-Villaverde, Garicano, Santos
- Winning by Losing: Incentive Incompatibility in Multiple QualifiersDagaev, Sonin
- Income and schoolingBrückner, Gradstein
- Monetary Policy and Rational Asset Price BubblesGalí
- How the EZ crisis is permanently changing EU institutionsMicossi
- WTO 2.0: Global governance of supply-chain tradeBaldwin
- Is US economic growth over? Faltering innovation confronts the six headwindsGordon
- The economic crisis: How to stimulate economies without increasing public debtWood
- Austerity: Too Much of a Good Thing?Corsetti