Evidence on Financial Globalization and Crises: Global Imbalances
La Follette School Working Paper Series No. 2011-002
23 Pages Posted: 10 Feb 2011
Date Written: February 2011
Abstract
Global imbalances are defined. Several explanations for the development of large current account deficits and surpluses in key economies during the period after 1997 are discussed, including the saving-investment approach, the intertemporal approach, mercantilism and the Bretton Woods II hypothesis, and the global saving glut view. A discussion of the literature linking the financial crisis of 2008-09 to the development of global imbalances concludes.
Keywords: Current account, net foreign assets, saving glut, investment drought, panel regressions, capital controls, institutional development
JEL Classification: F32, F41
Suggested Citation: Suggested Citation