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Schnabl, Gunther
Freitag, Stephan
Year of Publication: 
Series/Report no.: 
Working Paper // Universität Leipzig 76
The paper discusses global imbalances under the aspect of an asymmetric world monetary system. It identifies the US and euro area (Germany) as center countries with rising current account deficits (US) and surpluses (Germany) which are matched by respective current account surpluses of coun-tries stabilizing their exchange rates against the dollar (dollar periphery) and rising current account deficits of the countries stabilizing their exchange rate against the euro (euro periphery). The paper finds that the changes of the world current account positions are driven by the macroeconomic pol-icy decisions in the centers. In particular, expansionary monetary and fiscal policies in the US are argued to have triggered rising current account surpluses of the dollar periphery countries, as mone-tary and fiscal sterilization policies in the periphery contribute to rising saving surpluses.
Global Imbalances
Asymmetric World Monetary System
Twin Deficit
Twin Surplus
International Currency
Document Type: 
Working Paper

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