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Comments On ‘The Global Imbalances: What Is The Problem?’, The 2007 Wincott Lecture, Given By Max Corden

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  • Martin Wolf

Abstract

The view that the United States will be able to run significant deficits for a long time is convincing. However, the proposition that it makes sense for foreigners to invest in the USA because of the high returns is questionable. The value of their US assets is at risk from dollar depreciation, inflation and government sequestration. Accordingly, there is a danger that foreign investors will cut and run, causing a brutal and swift adjustment.

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  • Martin Wolf, 2008. "Comments On ‘The Global Imbalances: What Is The Problem?’, The 2007 Wincott Lecture, Given By Max Corden," Economic Affairs, Wiley Blackwell, vol. 28(2), pages 59-62, June.
    • Handle: RePEc:bla:ecaffa:v:28:y:2008:i:2:p:59-62
    DOI: 10.1111/j.1468-0270.2008.00825.x
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    References listed on IDEAS

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    1. Richard N. Cooper, 2005. "Living with Global Imbalances: A Contrarian View," Policy Briefs PB05-03, Peterson Institute for International Economics.
    2. Michael P. Dooley & David Folkerts-Landau & Peter M. Garber, 2004. "The US Current Account Deficit and Economic Development: Collateral for a Total Return Swap," NBER Working Papers 10727, National Bureau of Economic Research, Inc.
    3. W. Max Corden, 2007. "Those Current Account Imbalances: A Sceptical View1," The World Economy, Wiley Blackwell, vol. 30(3), pages 363-382, March.
    4. Richard H. Clarida, 2005. "Japan, China, and the U.S. Current Account Deficit," Cato Journal, Cato Journal, Cato Institute, vol. 25(1), Winter.
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    1. W. Max Corden, 2013. "Global imbalances and the paradox of thrift," Oxford Review of Economic Policy, Oxford University Press and Oxford Review of Economic Policy Limited, vol. 28(3), pages 431-443, AUTUMN.

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