TARGET balances, Bretton Woods, and the Great Depression

Michael Bordo, 21 March 2014

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During the Eurozone crisis, an analogy was made between the events in Europe between 2007 and 2012 and the collapse of the Bretton Woods System between 1968 and 1971. There has been a build-up of TARGET liabilities since 2007 by some central banks (notably Greece, Ireland, Portugal, and Spain, or the ‘GIPS’), and of TARGET assets by Germany and others.

Topics: Economic history, International finance
Tags: Bretton Woods, Central Banks, ECB, euro, Eurosystem, eurozone, Eurozone crisis, financial crisis, global imbalances, Great Depression, TARGET

Tracking the causes of Eurozone external imbalances: New evidence

Jose Luis Diaz Sanchez, Aristomene Varoudakis, 6 February 2014

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The Eurozone sovereign debt crisis, triggered by the 2008–09 global financial crisis, exposed macroeconomic imbalances in member countries that had accrued gradually following the advent of the euro in 1999.

Topics: International finance
Tags: competitiveness, European sovereign debt crisis, eurozone, global financial crisis, global imbalances

China's growth, stability, and use of international reserves

Joshua Aizenman, Yothin Jinjarak, Nancy P. Marion, 5 January 2014

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Pre-crisis imbalances

Topics: Global crisis
Tags: China, global crisis, global imbalances, US

Global and Eurozone imbalances: A question of civic capital?

Sascha Bützer, Christina Jordan, Livio Stracca, 23 November 2013

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Macroeconomic imbalances have been the subject of much debate in recent years, and are still in the spotlight. Before and during the financial crisis, a lot of attention was devoted to global imbalances – in particular to the persistent current-account deficits of some countries (such as the US) and the persistent surpluses of others (such as China).

Topics: Europe's nations and regions, International trade
Tags: civic capital, eurozone, global imbalances, trust, World Values Survey

International cooperation and central banks

Harold James, 8 October 2013

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Tackling the aftermath of a major financial crisis, the origins of which lie in ‘global imbalances’ and whose transmission mechanisms are cross-national, seems prima facie to demand more substantial and institutionalised cooperation. However, in the five years since the collapse of Lehman Brothers, visions of what central banks can and should do have changed profoundly.

Topics: Global crisis, International finance
Tags: Central Banks, Eurozone crisis, global crisis, global imbalances, monetary policy, policy coordination

Value-added exchange rates

Rudolfs Bems, Robert Johnson, 6 December 2012

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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.

Topics: Competition policy, Global economy, International trade
Tags: China, competitiveness, Germany, global imbalances, globalisation, iPhone, supply chains, trade

Global trade in services: Fear, facts, and offshoring

J. Bradford Jensen, 19 November 2012

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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.

Topics: International trade
Tags: global imbalances, international trade, protectionism, WTO

Slow but steady? External adjustment within the Eurozone starts working

Marco Buti, Alessandro Turrini, 12 November 2012

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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.

Topics: EU policies, Europe's nations and regions, Financial markets, Labour markets
Tags: banking union, Eurozone crisis, financial crisis, global imbalances, Greece

Global Rebalancing 2.0

Linda Lim, Ronald U Mendoza , 24 September 2012

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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.

Topics: Global economy
Tags: China, global imbalances, US

Why do Chinese households save so much?

Raman Ahmed, Heleen Mees, 28 August 2012

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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?

Topics: Global economy
Tags: China, global imbalances, savings rate

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