Causes and Consequences of Global Imbalances: Perspective from Developing Asia
Current account surpluses entail substantial costs for developing Asia in terms of welfare and growth. Thus, reducing excessive dependence on exports and laying the foundations for a stronger domestic demand will make the region better of.
Global current account imbalances are one of the key macroeconomic imbalances that underlie the global financial crisis. The central objective of this paper is to analyze the causes and consequences of global imbalances from the perspective of developing Asia. More specifically, it examines the root causes of the large and persistent current account surpluses that have emerged in the region since the Asian crisis. This paper also explores the consequences of global imbalances for the region, in terms of welfare and economic growth. Based on the analysis, it recommends a number of concrete policy directions to help Asia rebalance its demand and growth toward domestic sources.
- Profile of Global Imbalances and Current Account Positions of Asian Countries
- Causes of Developing Asia's Postcrisis Current Account Surpluses
- Consequences of Global Imbalances for Developing Asia
- Concluding Observations