Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/31465
Authors: 
Bibow, Jörg
Year of Publication: 
2008
Series/Report no.: 
Working papers // The Levy Economics Institute 531
Abstract: 
This paper sets out to investigate the forces behind the so-called "global capital flows paradox" and related "dollar glut" observed in the era of advancing financial globalization. The supposed paradox is that the developing world has increasingly come to pursue policies that result in current account surpluses and thus net capital exportsdestined primarily for the capital-rich United States. The hypothesis put forward here is that systemic deficiencies in the international monetary and financial order have been the root cause behind today's situation. Furthermore, it is argued that the United States' position as issuer of the world's premiere reserve currency and supremacy in global finance explain the related conundrum of a positive investment income balance despite a negative international investment position. The assessment is carried out in light of John Maynard Keynes's views on a sound international monetary and financial order.
Subjects: 
International Monetary Order
Global Imbalances
Capital Account Convertibility
Capital Flows
Reserver Currency
Financial Instability
Subprime Crisis
JEL: 
B25
B31
F02
F32
F33
F55
G18
Document Type: 
Working Paper

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