G7 Current Account Imbalances: Sustainability and Adjustment
edited by Richard H. Clarida
University of Chicago Press, 2007 Cloth: 978-0-226-10726-4 | eISBN: 978-0-226-10728-8 Library of Congress Classification HG3882.G25 2007 Dewey Decimal Classification 382.1709177
ABOUT THIS BOOK | AUTHOR BIOGRAPHY | TOC | REQUEST ACCESSIBLE FILE
ABOUT THIS BOOK
The current account deficit of the United States is more than six percent of its gross domestic product—an all-time high. And the rest of the world, including other G7 countries such as Japan and Germany, must collectively run current account surpluses to finance this deficit. How long can such unevenness between imports and exports be sustained, and what form might their eventual reconciliation take? Putting forth scenarios ranging from a gradual correction to a crash landing for the dollar, G7 Current Account Imbalances brings together economists from around the globe to consider the origins, status, and future of those disparities.
An esteemed group of collaborators here examines the role of the bursting of the dot-com bubble, the history of previous episodes of current account adjustments, and the possibility of the Euro surpassing the dollar as the leading international reserve currency. Though there are areas of broad agreement—that the imbalances will ultimately decline and that currency revaluations will be part of the solution—many areas of contention remain regarding both the dangers of imbalances and the possible forms of adjustment.
This volume will be of tremendous value to economists, politicians, and business leaders alike as they look to the future of the G7 economies.
AUTHOR BIOGRAPHY
Richard H. Clarida is the C. Lowell Harriss Professor of Economics at Columbia University, Global Strategic Advisor at PIMCO, and a research associate of the National Bureau of Economic Research. In 2002–2003, he served as Assistant US Treasury Secretary for Economic Policy.
TABLE OF CONTENTS
Acknowledgement
Introduction Richard H. Clarida
I. ORIGINS OF CURRENT ACCOUNT IMBALANCES
1. From World Banker to World Venture Capitalist: U.S. External Adjustment and the Exorbitant Privilege Pierre-Olivier Gourinchas and Hélène Rey Comment: José De Gregorio
2. A Global Perspective on External Positions
Philip R. Lane and Gian Maria Milesi-Ferretti Comment: Richard Portes
3. Direct Investment, Rising Real Wages, and the Absorption of Excess Labor in the Periphery
Michael P. Dooley, David Folkerts-Landau, and Peter Garber Comment: Shang-Jin Wei
II. EMPIRICAL STUDIES OF G7 CURRENT ACCOUNT AND EXCHANGE RATE ADJUSTMENT
4. Current Account Deficits in Industrial Countries: The Bigger They Are, the Harder They Fall? Caroline Freund and Frank Warnock Comment: Assaf Razin
5. Are There Thresholds of Current Account Adjustment in the G7?
Richard H. Clarida, manuela Goretti, and Mark P. Taylor Comment: Robert E. Cumby
6. Current Account Reversals: Always a Problem? Muge Adalet and Barry Eichengreen Comment: Fredric S. Mishkin
7. Understanding the U.S. Trade Deficit: A Disaggregated Persepective
Catherine L. Mann and Katherina Plück Comment: Edwin M. Truman
8. Will the Euro Eventually Surpass the Dollar as Leading International Reserve Currency?
Menzie Chinn and Jeffrey A. Frankel Comment: Edwin M. Truman
III. THEORETICAL PERSPECTIVES ON CURRENT ACCOUNT SUSTAINABILITY AND ADJUSTMENT
9. The Unsustainable U.S. Current Account Position Revisited Maurice Obstfeld and Kenneth Rogoff Comment: Kristin J. Forbes
10. Smooth Landing or Crash? Model-Based Scenarios of Global Current Account Rebalancing
Hamid Faruqee, Douglas Laxton, Dirk Muir, and Paolo A. Pesenti Comment: Lars E. O. Svensson
11. The Dot-Com Bubble, the Bush Deficits, and the U.S. Current Account Aart Kraay and Jaume Ventura Comment: Joseph E. Gagnon
Contributors
Author Index
Subject Index
REQUEST ACCESSIBLE FILE
If you are a student who cannot use this book in printed form, BiblioVault may be able to supply you
with an electronic file for alternative access.
Please have the accessibility coordinator at your school fill out this form.
G7 Current Account Imbalances: Sustainability and Adjustment
edited by Richard H. Clarida
University of Chicago Press, 2007 Cloth: 978-0-226-10726-4 eISBN: 978-0-226-10728-8
The current account deficit of the United States is more than six percent of its gross domestic product—an all-time high. And the rest of the world, including other G7 countries such as Japan and Germany, must collectively run current account surpluses to finance this deficit. How long can such unevenness between imports and exports be sustained, and what form might their eventual reconciliation take? Putting forth scenarios ranging from a gradual correction to a crash landing for the dollar, G7 Current Account Imbalances brings together economists from around the globe to consider the origins, status, and future of those disparities.
An esteemed group of collaborators here examines the role of the bursting of the dot-com bubble, the history of previous episodes of current account adjustments, and the possibility of the Euro surpassing the dollar as the leading international reserve currency. Though there are areas of broad agreement—that the imbalances will ultimately decline and that currency revaluations will be part of the solution—many areas of contention remain regarding both the dangers of imbalances and the possible forms of adjustment.
This volume will be of tremendous value to economists, politicians, and business leaders alike as they look to the future of the G7 economies.
AUTHOR BIOGRAPHY
Richard H. Clarida is the C. Lowell Harriss Professor of Economics at Columbia University, Global Strategic Advisor at PIMCO, and a research associate of the National Bureau of Economic Research. In 2002–2003, he served as Assistant US Treasury Secretary for Economic Policy.
TABLE OF CONTENTS
Acknowledgement
Introduction Richard H. Clarida
I. ORIGINS OF CURRENT ACCOUNT IMBALANCES
1. From World Banker to World Venture Capitalist: U.S. External Adjustment and the Exorbitant Privilege Pierre-Olivier Gourinchas and Hélène Rey Comment: José De Gregorio
2. A Global Perspective on External Positions
Philip R. Lane and Gian Maria Milesi-Ferretti Comment: Richard Portes
3. Direct Investment, Rising Real Wages, and the Absorption of Excess Labor in the Periphery
Michael P. Dooley, David Folkerts-Landau, and Peter Garber Comment: Shang-Jin Wei
II. EMPIRICAL STUDIES OF G7 CURRENT ACCOUNT AND EXCHANGE RATE ADJUSTMENT
4. Current Account Deficits in Industrial Countries: The Bigger They Are, the Harder They Fall? Caroline Freund and Frank Warnock Comment: Assaf Razin
5. Are There Thresholds of Current Account Adjustment in the G7?
Richard H. Clarida, manuela Goretti, and Mark P. Taylor Comment: Robert E. Cumby
6. Current Account Reversals: Always a Problem? Muge Adalet and Barry Eichengreen Comment: Fredric S. Mishkin
7. Understanding the U.S. Trade Deficit: A Disaggregated Persepective
Catherine L. Mann and Katherina Plück Comment: Edwin M. Truman
8. Will the Euro Eventually Surpass the Dollar as Leading International Reserve Currency?
Menzie Chinn and Jeffrey A. Frankel Comment: Edwin M. Truman
III. THEORETICAL PERSPECTIVES ON CURRENT ACCOUNT SUSTAINABILITY AND ADJUSTMENT
9. The Unsustainable U.S. Current Account Position Revisited Maurice Obstfeld and Kenneth Rogoff Comment: Kristin J. Forbes
10. Smooth Landing or Crash? Model-Based Scenarios of Global Current Account Rebalancing
Hamid Faruqee, Douglas Laxton, Dirk Muir, and Paolo A. Pesenti Comment: Lars E. O. Svensson
11. The Dot-Com Bubble, the Bush Deficits, and the U.S. Current Account Aart Kraay and Jaume Ventura Comment: Joseph E. Gagnon
Contributors
Author Index
Subject Index
REQUEST ACCESSIBLE FILE
If you are a student who cannot use this book in printed form, BiblioVault may be able to supply you
with an electronic file for alternative access.
Please have the accessibility coordinator at your school fill out this form.
It can take 2-3 weeks for requests to be filled.
ABOUT THIS BOOK | AUTHOR BIOGRAPHY | TOC | REQUEST ACCESSIBLE FILE