Evidence on Financial Globalization and Crises: Global Imbalances

La Follette School Working Paper Series No. 2011-002

23 Pages Posted: 10 Feb 2011

See all articles by Menzie David Chinn

Menzie David Chinn

University of Wisconsin, Madison - Robert M. La Follette School of Public Affairs and Department of Economics; National Bureau of Economic Research (NBER)

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

Chinn, Menzie David, Evidence on Financial Globalization and Crises: Global Imbalances (February 2011). La Follette School Working Paper Series No. 2011-002 , Available at SSRN: https://ssrn.com/abstract=1758876 or http://dx.doi.org/10.2139/ssrn.1758876

Menzie David Chinn (Contact Author)

University of Wisconsin, Madison - Robert M. La Follette School of Public Affairs and Department of Economics ( email )

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