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世界経済危機とグローバル・マネーの変動 ―国際経済秩序へのインプリケーションー
[Global Economic Crisis and Movements of Cross-Border Capital Flows ―Implication to the Global Economic Order―]

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  • Shirai, Sayuri

Abstract

Prior to the occurrence of the global financial crisis, the world had faced the “global imbalance.” This refers to the growing US current account deficit and, in parallel, the growing current account surpluses in China, other Asian countries, and resource-rich nations. This status of imbalance has been often called as the "Bretton Woods II system," as it shares the features similar to those of the Bretton Woods system prevailed from the 1945 to 1971. The Bretton Woods II system has been regarded sustainable for a time being as long as China and other Asian countries continue to pursue export-oriented growth strategies and actively intervene in the foreign exchange market aimed at stabilizing their currencies mainly against the US dollar. Nonetheless, the system entailed “instability” arising from the possibility of the system falling into the “hard-landing” scenario (triggered by the sudden withdrawal of foreign capital from the US markets, which leads to sharp dollar depreciation, decline in US stock prices, and cut in US long-term bond prices). The current global financial crisis differs from the hard-landing scenario, since it has not accompanied the “triple” declines. Nonetheless, the current crisis has resulted in re-balancing the global imbalance or a cut in US current account deficit. This paper examines the features related to the re-balancing of the global imbalance, and analyzes whether the structural features of the Brettton Woods II system as well as instability remain. The paper stresses that the imbalance between the United States and China has been strengthened further after the crisis, as evidenced from that fact that the share of China in US current account deficit has risen from about 30% in the pre-crisis period to over 70% currently. Structural features characterizing the Bretton Woods II system, as well as instability, have also been enhanced since the crisis. The paper also examines the possibility of the euro and SDR to replace the US dollar and concludes that the immediate substitution may not be possible in the near future. It also discusses the implications with respect to the framework for achieving strong, sustainable, balanced economic growth agreed in G20 financial summit in September 2009.

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Bibliographic Info

Paper provided by University Library of Munich, Germany in its series MPRA Paper with number 18619.

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Date of creation: Nov 2009
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Handle: RePEc:pra:mprapa:18619

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Keywords: Global Financial Crisis; G20 Summit; Global Imlabace; Hard-Landing Scenario; Instability; China;

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References

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  1. Ila Patnaik & Ajay Shah, 2009. "The difficulties of the Chinese and Indian exchange rate regimes," European Journal of Comparative Economics, Cattaneo University (LIUC), vol. 6(1), pages 157-173, June.
  2. Ronald McKinnon & Gunther Schnabl, 2009. "China's financial conundrum and global imbalances," BIS Working Papers 277, Bank for International Settlements.
  3. Pietro Alessandrini & Michele Fratianni, 2009. "International Monies, Special Drawing Rights, and Supernational Money," Working Papers 2009-03, Indiana University, Kelley School of Business, Department of Business Economics and Public Policy.
  4. Eswar S. Prasad, 2009. "Effects of the Financial Crisis on the U.S.-China Economic Relationship," Cato Journal, Cato Journal, Cato Institute, vol. 29(2), pages 223-235, Winter.
  5. Michael Dooley & David Folkerts-Landau & Peter Garber, 2009. "Bretton Woods Ii Still Defines The International Monetary System," Pacific Economic Review, Wiley Blackwell, vol. 14(3), pages 297-311, 08.
  6. Nouriel Roubini & Brad Setser, 2005. "Will the Bretton Woods 2 regime unravel soon? the risk of a hard landing in 2005-2006," Proceedings, Federal Reserve Bank of San Francisco, issue Feb.
  7. Michael Dooley & David Folkerts-Landau & Peter Garber, 2005. "An essay on the revived Bretton Woods system," Proceedings, Federal Reserve Bank of San Francisco, issue Feb.
  8. Shirai, Sayuri, 2009. "Evaluating the Present State of Japan as An International Financial Center," MPRA Paper 14720, University Library of Munich, Germany.
  9. Shirai, Sayuri, 2009. "The Impact of the US Subprime Mortgage Crisis on the World and East Asia," MPRA Paper 14722, University Library of Munich, Germany.
  10. Sayuri SHIRAI, 2009. "The Impact of the US Subprime Mortgage Crisis on the World and East Asia: Through Analyses of Cross-border Capital Movements," Working Papers d013, Economic Research Institute for ASEAN and East Asia (ERIA).
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