A Requiem for "Blame It on Beijing": Interpreting Rotating Global Current Account Surpluses / Menzie D. Chinn, Hiro Ito.

Format:

Book

Author/Creator:

Chinn, Menzie D.

Contributor:

National Bureau of Economic Research.

Ito, Hiro.

Series:

Working Paper Series (National Bureau of Economic Research) no. w26226.

NBER working paper series no. w26226

Language:

English

Physical Description:

1 online resource: illustrations (black and white);

Other Title:

Requiem for “Blame It on Beijing”

Place of Publication:

Cambridge, Mass. National Bureau of Economic Research 2019.

Summary:

Global current account imbalances have reappeared, although the extent and distribution of these imbalances are noticeably different from those experienced in the middle of the last decade. What does that recurrence mean for our understanding of the origin and nature of such imbalances? Will imbalances persist over time? Informed by empirical estimates of the determinants of current account imbalances encompassing the period after the global recession, we find that - as before - the observable manifestations of the factors driving the global saving glut have limited explanatory power for the time series variation in imbalances. Fiscal factors determine imbalances, and have accounted for a noticeable share of the recent variation in imbalances, including in the U.S. and Germany. For advanced economies, the financial component of the current account has been playing an increasing role to determine the movements of the account. Examining observable policy actions, it is clear that net official flows have been associated with some share of imbalances, although tracing out the motivations for intervention is difficult. Looking forward, it is clear that policy can influence global imbalances, although some component of the U.S. deficit will likely remain given the U.S. role in generating safe assets.

Notes:

Print version record

September 2019.