Global Imbalances

• Authors: Chalotorn Sinproh , Juraj Sipko
• Languages of publication: EN

Abstracts

EN

Purpose of the article The aim of the paper is to analyze the global economic imbalances and factors that contributed to their deterioration in developed and emerging countries, primarily in the United States and China. The article assesses the main inevitable factors of the global economic imbalances that have driven the recent evolution of current account balances. In addition, the paper describes the theoretical framework of global imbalances and the relevant fundamental theories for better understanding in theoretical aspect of international economics and finance. Furthermore, provides overview of the fundamental causes and drivers of global imbalances, namely current account. Methodology/methods In relation to the subject and purpose of this paper have been used the logical methods of examination which mainly include analysis, correlation and regression analysis, abstraction, synthesis, induction and deduction, the methods of descriptive and mathematical statistics, comparative and empirical methods and the selected forecasting methods (causal prognosis methods). Scientific aim The global imbalances are considered as the most disputable and well known of the global current economic problem, which possibly explain the causes of the global financial crisis. The global financial imbalances were quite massive even before the outbreak of the global financial crisis in 2008. Therefore, the main scientific goal of this paper to analyse what is behind the current account imbalances in both countries, e.i. the USA and China. Findings The persistent current account imbalances reflected the imbalances in the world investment and savings ratios. Whereas the U.S. national savings rate kept falling, the Chinese savings rate rose. Current account imbalances will keep on growing due to a problem of insufficient global saving. Conclusions (limits, implications etc)The size of global imbalances has become narrow compared to the prior crisis’s level, but it did not vanish due to the implementation of global rebalancing process. Putting the current account imbalance to cooperation of all participating countries is strongly necessary. The policy response will need to involve many more countries, even G20 process, and coordinating this response will require considerable efforts of every party members.

Keywords

EN

global imbalances; current account; savings; investment; foreign exchange; C23; C33; F32; O57

• Publisher: Sciendo
• Journal: Creative and Knowledge Society
• Year: 2014
• Volume: 4
• Issue: 1

Dates

published

2014-07-01

online

2016-02-04

Contributors

author

Chalotorn Sinproh

• Faculty of International Relations, University of Economics in Bratislava, Dolnozemská 1 Bratislava, Slovak Republic.

author

Juraj Sipko

• Faculty of Economics and Business, Pan-European University, Tematínska 10, 851 05 Bratislava, Slovak Republic, [phone], Institute of Economic Research, Slovak Academy of Science, Šancová 5, 811 05 Bratislava, Slovak Republic, [phone]

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Identifiers

DOI

10.2478/cks-2014-0006