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Global and euro imbalances: China and Germany

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  • Guonan Ma
  • Robert N McCauley

Abstract

We analyse global and euro area imbalances by focusing on China and Germany as large surplus and creditor countries. In the 2000s, domestic reforms in both countries expanded the effective labour force, restrained wages, shifted income towards profits and increased corporate saving. As a result, both economies' current account surpluses widened before the global financial crisis, and that of Germany has proven more persistent as domestic investment has remained subdued.

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Bibliographic Info

Paper provided by Bank for International Settlements in its series BIS Working Papers with number 424.

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Length: 32 pages
Date of creation: Sep 2013
Date of revision:
Handle: RePEc:bis:biswps:424

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Keywords: Global imbalances; current account; capital account; saving and investment; international assets and liabilities; distribution of income; world banker;

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References

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  1. Hyun Song Shin, 2012. "Global Banking Glut and Loan Risk Premium," IMF Economic Review, Palgrave Macmillan, Palgrave Macmillan, vol. 60(2), pages 155-192, July.
  2. Philip R. Lane & Gian-Maria Milesi-Ferretti, 2003. "International Financial Integration," IMF Working Papers, International Monetary Fund 03/86, International Monetary Fund.
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  4. Sengupta, Rajeswari & Aizenman, Joshua, 2010. "Global imbalances: Is Germany the new China? A skeptical view," MPRA Paper 25578, University Library of Munich, Germany.
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  6. Olivier Blanchard & Francesco Giavazzi, 2002. "Current Account Deficits in the Euro Area: The End of the Feldstein Horioka Puzzle?," Brookings Papers on Economic Activity, Economic Studies Program, The Brookings Institution, vol. 33(2), pages 147-210.
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  8. Guonan Ma & Wang Yi, 2010. "China's high saving rate: myth and reality," BIS Working Papers, Bank for International Settlements 312, Bank for International Settlements.
  9. Claudio Borio & Piti Disyatat, 2011. "Global imbalances and the financial crisis: Link or no link?," BIS Working Papers, Bank for International Settlements 346, Bank for International Settlements.
  10. Pierre-Olivier Gourinchas & Helene Rey & Nicolas Govillot, 2010. "Exorbitant Privilege and Exorbitant Duty," IMES Discussion Paper Series, Institute for Monetary and Economic Studies, Bank of Japan 10-E-20, Institute for Monetary and Economic Studies, Bank of Japan.
  11. Gros, Daniel & Mayer, Thomas, 2012. "A Sovereign Wealth Fund to Lift Germany’s Curse of Excess Savings," CEPS Papers, Centre for European Policy Studies 7229, Centre for European Policy Studies.
  12. Guonan Ma & Robert McCauley & Lillie Lam, 2013. "The Roles of Saving, Investment and the Renminbi in Rebalancing the Chinese Economy," Review of International Economics, Wiley Blackwell, Wiley Blackwell, vol. 21(1), pages 72-84, 02.
  13. Curcuru, Stephanie E. & Thomas, Charles P. & Warnock, Francis E., 2013. "On returns differentials," Journal of International Money and Finance, Elsevier, Elsevier, vol. 36(C), pages 1-25.
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  15. Jorg Bibow, 2012. "The Euro Debt Crisis and Germany's Euro Trilemma," Economics Working Paper Archive, Levy Economics Institute wp_721, Levy Economics Institute.
  16. Maurice Obstfeld, 2012. "Does the Current Account Still Matter?," American Economic Review, American Economic Association, American Economic Association, vol. 102(3), pages 1-23, May.
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Cited by:
  1. Stefan Behrendt, 2014. "The Fiscal Compact and Current Account Patterns in Europe," Global Financial Markets Working Paper Series 2014-52, Friedrich-Schiller-University Jena.

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