Publication: US–China External Imbalance and the Global Financial Crisis
| dc.contributor.author | Im, Fernando | |
| dc.contributor.author | Lin, Justin Yifu | |
| dc.contributor.author | Dinh, Hinh T. | |
| dc.date.accessioned | 2013-09-12T19:15:52Z | |
| dc.date.available | 2013-09-12T19:15:52Z | |
| dc.date.issued | 2010-06-23 | |
| dc.description.abstract | This paper advances an alternative explanation of the large external imbalance between the United States and China, and its linkages to the current global financial crisis. We show that US current account deficits dated back long before the emergence of China's recent large trade surpluses, with China accounting at its peak for at most one-third of this deficit. The relative rise in China's savings in recent years can be attributed to an increase in its corporate savings, a trend that reflects distortions arising from the transition process from a planned to a market economy. These distortions exacerbate China's income inequality, causing domestic consumption to remain a small share of GDP. Large recent current account deficits in the United States, on the other hand, can be attributed to public sector disserving and perverse incentives generated by housing and equity bubbles, made possible by loose monetary policy and by “innovative” financial derivatives arising from the financial deregulation in the early 1980s. The paper shows that short-run measures are unlikely to fully address these external imbalances. Both countries require long-run, structural measures to resolve the underlying problems and to restore a sustainable foundation for growth. | en |
| dc.identifier.citation | China Economic Journal | |
| dc.identifier.doi | 10.1596/15765 | |
| dc.identifier.issn | 1753-8971 | |
| dc.identifier.other | DOI:10.1080/17538963.2010.487348 | |
| dc.identifier.uri | https://hdl.handle.net/10986/15765 | |
| dc.language.iso | en_US | |
| dc.publisher | Taylor and Francis | |
| dc.relation.uri | http://creativecommons.org/licenses/by-nc-nd/3.0/igo | |
| dc.rights | CC BY-NC-ND 3.0 IGO | |
| dc.rights.holder | World Bank | |
| dc.rights.uri | http://creativecommons.org/licenses/by-nc-nd/3.0/igo/ | |
| dc.subject | global imbalance | |
| dc.subject | financial crisis | |
| dc.subject | economic distortion | |
| dc.title | US–China External Imbalance and the Global Financial Crisis | en |
| dc.type | Journal Article | en |
| dc.type | Article de journal | fr |
| dc.type | Artículo de revista | es |
| dspace.entity.type | Publication | |
| okr.date.doiregistration | 2025-05-06T11:19:12.684101Z | |
| okr.doctype | Journal Article | |
| okr.externalcontent | External Content | |
| okr.globalpractice | Macroeconomics and Fiscal Management | |
| okr.globalpractice | Finance and Markets | |
| okr.globalpractice | Trade and Competitiveness | |
| okr.identifier.doi | 10.1080/17538963.2010.487348 | |
| okr.journal.nbpages | 1-24 | |
| okr.language.supported | en | |
| okr.peerreview | Academic Peer Review | |
| okr.region.country | China | |
| okr.region.country | United States | |
| okr.relation.associatedurl | http://www.tandfonline.com/doi/full/10.1080/17538963.2010.487348 | |
| okr.theme | Trade and integration :: International financial architecture | |
| okr.topic | Finance and Financial Sector Development::Capital Markets and Capital Flows | |
| okr.topic | Finance and Financial Sector Development::International Financial Markets | |
| okr.topic | International Economics and Trade::Foreign Direct Investment | |
| okr.topic | International Economics and Trade::Globalization and Financial Integration | |
| okr.topic | Macroeconomics and Economic Growth::Investment and Investment Climate | |
| okr.volume | 3(1) | |
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| relation.isAuthorOfPublication.latestForDiscovery | 6f9860c3-5c17-54f1-92fb-9f5055cc0038 |