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dc.contributor.authorBelke, Ansgaren_US
dc.contributor.authorGros, Danielen_US
dc.date.accessioned2010-02-24en_US
dc.date.accessioned2010-07-22T09:28:38Z-
dc.date.available2010-07-22T09:28:38Z-
dc.date.issued2010en_US
dc.identifier.urihttp://hdl.handle.net/10419/36714-
dc.description.abstractThe global imbalances of the 2000s and the recent global financial crisis are intimately connected. Both originate in the combination of economic policies adopted by the two key economies, the US and China. Global financial markets served as a transmission belt, both during the boom as during the bust. In the US, the interaction among the Fed's monetary stance, global real interest rates, distorted incentives in credit markets, and financial innovation created the mix of conditions which first drove growth, but then made the US the epicenter of the global financial crisis. Exchange rate and other economic policies followed by emerging markets such as China and the oil-exporting countries contributed to the US ability to borrow cheaply abroad and thereby finance its unsustainable housing bubble during the upswing. But we find that the key drivers of asset prices are global liquidity conditions. Central banks flooded the markets with ample liquidity. Mopping up this excess liquidity will be one major task for central banks worldwide, which needs to be done in a coordinated fashion. Moreover, our analysis has shown that liquidity will first show up in asset price inflation and only later in consumer goods inflation. This renders it difficult for central bank to exit from their current very expansive monetary policy stance if they continue to focus only on price stability.en_US
dc.language.isoengen_US
dc.publisherDeutsches Institut für Wirtschaftsforschung (DIW) Berlinen_US
dc.relation.ispartofseriesDiscussion papers // German Institute for Economic Research 973en_US
dc.subject.jelE21en_US
dc.subject.jelE43en_US
dc.subject.jelE52en_US
dc.subject.jelF32en_US
dc.subject.jelF42en_US
dc.subject.jelQ43en_US
dc.subject.ddc330en_US
dc.subject.keywordAsset pricesen_US
dc.subject.keywordChinaen_US
dc.subject.keywordcurrent account adjustmenten_US
dc.subject.keywordglobal liquidityen_US
dc.subject.keywordoil pricesen_US
dc.subject.keywordsavings gluten_US
dc.subject.keywordmonetary policyen_US
dc.subject.keywordpolicy coordinationen_US
dc.subject.stwGeldpolitiken_US
dc.subject.stwInternationale wirtschaftspolitische Koordinationen_US
dc.subject.stwSparenen_US
dc.subject.stwGesamtwirtschaftliche Liquiditäten_US
dc.subject.stwZahlungsbilanzungleichgewichten_US
dc.subject.stwVermögenen_US
dc.subject.stwInflationen_US
dc.subject.stwFinanzmarktkriseen_US
dc.subject.stwWelten_US
dc.subject.stwUSAen_US
dc.subject.stwChinaen_US
dc.titleGlobal liquidity, world savings glut and global policy coordinationen_US
dc.typeWorking Paperen_US
dc.identifier.ppn619487208en_US
dc.rightshttp://www.econstor.eu/dspace/Nutzungsbedingungen-
Appears in Collections:Publikationen von Forscherinnen und Forschern des DIW
DIW-Diskussionspapiere

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