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Should there be a coordinated response to the problem of global imbalances? Can there be one?

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  • Barry Eichengreen

Abstract

This paper analyzes the options for international policy coordination in order to redress the global imbalances. The case for policy coordination rests on a number of assumptions such as the existence of important spillover effects of national policies and a common understanding of the nature of the problem. In reality, important obstacles exist to get to effective policy coordination, including resistance from domestic interest groups and disagreement of the effectiveness of policy instruments. These obstacles can be reduced by developing a multilateral consensus on common goals and by addressing commitment problems via issuing multi-year schedules for policy adjustments.

Suggested Citation

  • Barry Eichengreen, 2008. "Should there be a coordinated response to the problem of global imbalances? Can there be one?," Working Papers 69, United Nations, Department of Economics and Social Affairs.
  • Handle: RePEc:une:wpaper:69
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    File URL: http://www.un.org/esa/desa/papers/2008/wp69_2008.pdf
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    References listed on IDEAS

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    Cited by:

    1. Kenc, Turalay & Dibooglu, Sel, 2010. "The 2007-2009 financial crisis, global imbalances and capital flows: Implications for reform," Economic Systems, Elsevier, vol. 34(1), pages 3-21, March.

    More about this item

    Keywords

    Global imbalances; international policy coordination; international financial architecture;

    JEL classification:

    • F32 - International Economics - - International Finance - - - Current Account Adjustment; Short-term Capital Movements
    • F33 - International Economics - - International Finance - - - International Monetary Arrangements and Institutions
    • F53 - International Economics - - International Relations, National Security, and International Political Economy - - - International Agreements and Observance; International Organizations

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