Living with global imbalances: A contrarian view

This paper questions three separate but related contentions: that Americans save too little; that the large US current account deficit is unsustainable; and that the Chinese currency (rmb) requires large appreciation. Viewed from the perspective of a knowledge-based economy in a globalized world und...

Full description

Saved in:
Bibliographic Details
Published inJournal of policy modeling Vol. 28; no. 6; pp. 615 - 627
Main Author Cooper, Richard N.
Format Journal Article
LanguageEnglish
Published New York Elsevier Inc 01.09.2006
Elsevier
Elsevier Sequoia S.A
SeriesJournal of Policy Modeling
Subjects
Balance of payments
Balance of trade
Chinese currency
Currency revaluation
Current account
Current accounts
Deficits
Economic crisis
Global economy
Global imbalances
Savings
Savings rate
Studies
US current account deficit
World economy
Yuan
United States > US
China
F30
F41
Savings rate
F01
US current account deficit
Chinese currency
Global imbalances
Online AccessGet full text

Cover

More Information
Summary:This paper questions three separate but related contentions: that Americans save too little; that the large US current account deficit is unsustainable; and that the Chinese currency (rmb) requires large appreciation. Viewed from the perspective of a knowledge-based economy in a globalized world undergoing dramatic demographic change, Americans save quite enough for the future and the US current account deficit is a natural and indeed an expected phenomenon. It can persist for many years. The current configuration of surpluses and deficits is mutually beneficial so long as Americans continue to invest productively. A significant revaluation of the rmb would yield little benefit and would run a grave risk of precipitating financial crises.
Bibliography:ObjectType-Article-2
SourceType-Scholarly Journals-1
ObjectType-Feature-1
content type line 23
ISSN:0161-8938
1873-8060
DOI:10.1016/j.jpolmod.2006.06.007