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http://hdl.handle.net/10419/31466
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| Title: | | Global imbalances, Bretton Woods II, and Euroland's role in all this  |
| Authors: | | Bibow, Jörg |
| Issue Date: | | 2006 |
| Series/Report no.: | | Working papers // The Levy Economics Institute 486 |
| Abstract: | | Approaching the issue of mounting global imbalances from the perspective of the Bretton Woods II hypothesis, this paper argues that the popular preoccupation with China’s supposed export-led development strategy is misplaced. It also suggests, similar to Japan’s depression, subdued growth in Euroland for most of the time since the Maastricht Treaty has been of first-order importance in these developments. Germany is identified as being at the heart of the European trouble. Globally, there is an ongoing clash between two approches to macroeconomic policy making: a highly dogmatic German approach, and a very pragmatic Anglo-Saxon one. The low levels of interest at which global demand imbalances have been smoothed out financially reflect deficient global demand in an environment of vast supply-side opportunities. After contributing greatly to the build-up of imbalances, Euroland is unlikely to play any constructive part in their unwinding. Hampered by an exchange-rate policy vacuum, a small-country mindset, and soaring intra-area imbalances, Euroland is also illpositioned to cope with fading external growth stimuli. |
| Subjects: | | Global Imbalances Revised Bretton Woods EMU Divergences Export-led Growth Reserve Currency |
| JEL: | | E63 F02 F32 F43 N10 |
| Document Type: | | Working Paper |
| Appears in Collections: | | Working Papers, Levy Economics Institute of Bard College
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