Understanding Global Imbalances/Comments on "Understanding Global Imbalances" by Richard N. Cooper/Comments on "Understanding Global Imbalances" by Richard N. Cooper

Two contemporary issues provide reason to focus on national savings and investment. First, the debate over public pensions, and pensions more generally, taking place in all rich countries. Second, the large global current account imbalances that conceptually represent the difference between national...

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Bibliographic Details
Published inFederal Reserve Bank of Boston. Conference Series no. 51; p. 237
Main Authors Cooper, Richard N, Debelle, Guy, Kotlikoff, Laurence J
Format Trade Publication Article
LanguageEnglish
Published Boston Federal Reserve Bank of Boston 01.06.2006
Subjects
Accounting
Audio equipment
Budget deficits
Capital expenditures
Consumption
Deficits
Economic theory
Education
Federal budget
GDP
Global economy
Gross Domestic Product
Households
Investments
Recessions
Retained earnings
Risk management
Savings
Statistical data
United States > US
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Summary:Two contemporary issues provide reason to focus on national savings and investment. First, the debate over public pensions, and pensions more generally, taking place in all rich countries. Second, the large global current account imbalances that conceptually represent the difference between national savings and domestic investment. Are all of us living in advanced economies saving enough to provide adequate retirement income for our rapidly aging populations? This question is especially pertinent to Americans, whose household savings rate seems to have disappeared altogether in 2005. And are the countries with large external deficits - notably the United States - inappropriately mortgaging the income of future generations, not to mention courting financial calamity in the meantime? This paper will not answer either question definitively, but I hope to shed some light both on the issue of saving adequately for retirement, and especially on the second issue of the potential risks posed by large external deficits. The United States will be the focus of attention, but in an increasingly interconnected global economy it is anachronistic to focus on domestic factors alone - and it is simply inappropriate when the issue is the country's external deficit: equal attention must be devoted to the counterpart surpluses elsewhere in the world. [PUBLICATION ABSTRACT]
ISSN:0361-8714