Working Paper: NBER ID: w12194
Authors: Richard H. Clarida
Abstract: This volume collects the eleven original papers that were written for the NBER Project on G7 Current Account Imbalances. Four major themes emerged from the papers written for the project. First, there was broad agreement that the current account imbalances that prevailed among the G7 countries as of June 2005 would ultimately decline, although there was no consensus on when or how this would occur . Second, there was agreement that adjustments in global currency markets would likely be associated with the shifts in global saving and investment patterns that would be required to bring about the ultimate decline in G7 current account imbalances. Third, while the focus of the conference was on current account imbalances in the G7 countries, it was recognized that the aggregate excess of saving over investment that existed among the emerging market economies at the time of the conference, as well as the currency intervention policies of some of these countries, were contributing to the current imbalances in the G7 that prevailed as of June 2005. Fourth, there was a consensus that re-valuation of the evolving foreign asset and liability positions of the G7 countries would play a role during process by which current account imbalances narrowed, although there was range of opinion concerning how large a role such revaluation effects would play.
Keywords: No keywords provided
JEL Codes: F3; F4
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| current account imbalances among G7 countries (F32) | decline in current account imbalances among G7 countries (F32) |
| adjustments in global currency markets (F31) | decline in current account imbalances among G7 countries (F32) |
| global saving and investment patterns (F30) | decline in current account imbalances among G7 countries (F32) |
| excess saving among emerging market economies (F32) | current account imbalances in G7 countries (F32) |
| revaluation of foreign asset and liability positions of G7 countries (F31) | narrowing of current account imbalances (F32) |