Jump to ContentJump to Main Navigation
G7 Current Account ImbalancesSustainability and Adjustment$
Users without a subscription are not able to see the full content.

Richard H. Clarida

Print publication date: 2007

Print ISBN-13: 9780226107264

Published to Chicago Scholarship Online: February 2013

DOI: 10.7208/chicago/9780226107288.001.0001

Show Summary Details
Page of

PRINTED FROM CHICAGO SCHOLARSHIP ONLINE (www.chicago.universitypressscholarship.com). (c) Copyright University of Chicago Press, 2021. All Rights Reserved. An individual user may print out a PDF of a single chapter of a monograph in CHSO for personal use.date: 24 July 2021

Smooth Landing or Crash?

Smooth Landing or Crash?

Model-Based Scenarios of Global Current Account Rebalancing

Chapter:
(p.377) 10 Smooth Landing or Crash?
Source:
G7 Current Account Imbalances
Author(s):

Hamid Faruqee

Douglas Laxton

Dirk Muir

Paolo A. Pesenti

Publisher:
University of Chicago Press
DOI:10.7208/chicago/9780226107288.003.0011

This chapter employs a sophisticated new open economy multicountry simulation model to examine different scenarios for global current account adjustment. The analysis indicates that competition-friendly structural policies could play a prominent role in reducing current account imbalances on a sustainable basis if they were linked with a sustained increase in growth and a permanent downward shift in the net foreign asset positions of Europe and Japan. Japan and the euro area are relatively stable in terms of adjustment. US fiscal consolidation would not be obtained without some short-run costs for output growth. Europe and Japan could meaningfully add to the multilateral adjustment process through stronger pursuit of growth-enhancing structural reforms that align with their own national interests. Labor market reforms alone might not significantly contribute to rebalancing.

Keywords:   simulation model, global current account adjustment, structural policies, current account imbalances, foreign asset, Europe, Japan, labor market reforms

Chicago Scholarship Online requires a subscription or purchase to access the full text of books within the service. Public users can however freely search the site and view the abstracts and keywords for each book and chapter.

Please, subscribe or login to access full text content.

If you think you should have access to this title, please contact your librarian.

To troubleshoot, please check our FAQs, and if you can't find the answer there, please contact us.