Publication: Back to Global Imbalances?
Date
2009-07
ISSN
Published
2009-07
Abstract
The 2008-2009 financial crisis has
shaken the prevailing equilibrium of the global economy,
with a collapse in capital flows and international trade.
How will the post-crisis constellation of current account
imbalances look? Will the world resume financing the United
States (US), and continue sustaining large external
imbalances there? Contrary to what many expected, some
forces unleashed by the crisis have kept US assets
attractive and the dollar strong, decreasing the need for an
immediate reduction of global imbalances. Over the long run,
however, real sector and financial sector forces are likely
to impose a correction, perhaps involving a depreciation of
the dollar and a major reallocation of international portfolios.
Citation
“de la Torre, Augusto; Schmukler, Sergio L.; Servén, Luis. 2009. Back to Global Imbalances?. Latin America and the Caribbean Region (LCR) Crisis Briefs. © World Bank, Washington, DC. http://openknowledge.worldbank.org/entities/publication/5b9c2722-b3a1-5c3f-abbb-f60087317a11 License: CC BY 3.0 IGO.”