The Inefficiency of the Adjustment Mechanism in the Contemporary Global Economy the Case of the United States and China

• Autorzy: Małgorzata Janicka

Warianty tytułu

Nieefektywność mechanizmu wyrównawczego we współczesnej gospodarce światowej : przypadek Stanów Zjednoczonych i Chin

• Języki publikacji: EN

Abstrakty

EN

In the current international monetary system, the adjustment mechanism does not work properly to eliminate the excessive surpluses/deficits on the current accounts of the major countries that participate in international trade. Consequently, the adjustment changes do not take place in an evolutionary way, through market changes or decisions taken by the national authorities. They are the result of crises that reflect the unfavourable macroeconomic situation in different countries. The article explains the functioning of the adjustment mechanism in the contemporary international monetary system and the circumstances in which significant imbalances emerge at the global (US-China) level. Increasing external imbalances are an immanent systemic feature of the contemporary international monetary system. The lack of an adjustment mechanism in this system leads to the potentially cyclical emergence of such imbalances and their correction by crises. Thus, the current post-crisis period may only be a stage before the next period of growing imbalances. The remedy for this threat lies in correcting the existing principles of the system. (original abstract)

We współczesnym międzynarodowym systemie walutowym mechanizm wyrównawczy nie działa prawidłowo, co utrudnia eliminację nadmiernych nadwyżek/deficytów na rachunkach bieżących bilansu płatniczego kluczowych krajów uczestniczących w handlu międzynarodowym. Zmiany dostosowawcze następują nie w wyniku procesów zachodzących na rynku lub decyzji władz krajowych, ale są przede wszystkim efektem wydarzeń kryzysowych w gospodarce globalnej. Celem artykułu jest analiza funkcjonowania mechanizmu dostosowawczego we współczesnym międzynarodowym systemie walutowym oraz uwarunkowań powstawania znaczących nierównowag na poziomie globalnym (na przykładzie USA-Chiny). Nierównowagi zewnętrzne można uznać za immanentną cechę strukturalną współczesnego międzynarodowego systemu walutowego. Brak sprawnego mechanizmu wyrównawczego w tym systemie prowadzi do potencjalnie cyklicznego powstawania takich nierównowag i ich korygowania przez wydarzenia kryzysowe. Oznacza to, że okres pokryzysowy może być jedynie etapem przed kolejnym okresem narastania nierównowagi i jej korekty w efekcie wystąpienia zjawisk kryzysowych. Konieczne staje się w tej sytuacji skorygowanie dotychczasowych zasad systemu, dzięki czemu działanie mechanizmu wyrównawczego zostanie usprawnione. (abstrakt oryginalny)

Słowa kluczowe

EN

World economy; Currency systems

PL

Gospodarka światowa; Systemy walutowe

• Czasopismo: Comparative Economic Research
• Rocznik: 2022
• Tom: 25
• Numer: nr 1
• Strony: 39--54

Twórcy

autor

Małgorzata Janicka

• University of Lodz, Poland

Bibliografia

• Adams, Ch., Park, D. (2009), Causes and Consequences of Global Imbalances: Perspective from Developing Asia, "Asian Development Bank Economics Working Paper Series", 157, https://doi.org/10.2139/ssrn.1611424
• Alberola, E., Estrada, A., Viani, F. (2020), Global imbalances from a stock perspective: The asymmetry between creditors and debtors, "Journal of International Money and Finance", 107, https://doi.org/10.1016/j.jimonfin.2020.102206
• Barrel, R., Holland, D., Hurst, I. (2007), Sustainable Adjustment of Global Imbalances, "Studies & Analyses CASE", 343, https://doi.org/10.2139/ssrn.1436908
• Blanchard, O. (2007), Current Account Deficits in Rich Countries, "Working Paper", 12925, National Bureau of Economic Research, Cambridge, https://doi.org/10.3386/w12925
• Bordo, M.D. (2005), Historical perspective on global imbalances, "Working Paper", 11383, National Bureau of Economic Research, Cambridge, https://doi.org/10.3386/w11383
• Borio, C., Disyatat, P. (2010), Global Imbalances and the Financial Crisis: Reassessing the Role of International Finance, "Asian Economic Policy Review", 5 (2), pp. 198-216, https://doi.org/10.1111/j.1748-3131.2010.01163.x
• Ca" Zorzi, M., Chudik, A., Dieppe, A. (2012), Thousands of models, one story: Current account imbalances in the global economy, "Journal of International Money and Finance", 31 (6), pp. 1319-1338, https://doi.org/10.1016/j.jimonfin.2012.02.003
• Caballero, R.J., Farhi, E., Gourinchas, P.-O. (2015), Global Imbalances and Currency Wars at the ZLB, "NBER Working Paper", 21670, National Bureau of Economic Research, Cambridge, https://doi.org/10.3386/w21670
• Chinn, M.D., Ito, H. (2019), A Requiem for "Blame It on Beijing": Interpreting Rotating Global Current Account Surpluses, "NBER Working Paper", 26226, National Bureau of Economic Research, Cambridge, https://doi.org/10.3386/w26226
• Ciocyte, O., Rojas-Romagosa, H. (2015), Literature survey on the theoretical explanations and empirical determinants of current account balances, CPB Netherlands Bureau for Economic Policy Analysis, The Hague, https://www.cpb.nl/sites/default/files/publicaties/download/cpb-background-document-literature-survey-theoretical-explanations.pdf (accessed: 21.03.2020).
• Clarida, R.H., Goretti, M., Taylor, M.P. (2006), Are There Thresholds of Current Account Adjustment in the G7?, Working Paper 12193, http://www.nber.org/papers/w12193 (accessed: 21.03.2020).
• Collignon, S. (2006), Adjusting the U.S. Current Account Deficit: What Role for the Dollar, Euro and Yen?, "Journal of Asia-Pacific Business", 7 (2), pp. 5-26, https://doi.org/10.1300/J098v07n02_02
• Coughlin, C.C., Pakko, M.R., Poole, W. (2006), How dangerous is the U.S. current account deficit?, "The Regional Economist", April, pp. 4-9, https://files.stlouisfed.org/files/htdocs/publications/regional/06/04/account_deficit.pdf (accessed: 20.12.2020).
• Debelle, G., Galati, G. (2005), Current account adjustment and capital flows, "BIS Working Papers", 169, https://doi.org/10.2139/ssrn.781164
• De Cecco, M. (2012), Global Imbalances: Past, Present, and Future, "Contributions to Political Economy", 31 (1), pp. 29-50, https://doi.org/10.1093/cpe/bzs001
• Devereux, M.B., Genberg, H. (2007), Currency appreciation and current account adjustment, "Journal of International Money and Finance", 26 (4), pp. 570-586, https://doi.org/10.1016/j.jimonfin.2007.03.008
• Dooley, M.P., Folkerts-Landau, D., Garber, P. (2003), An Essay on the Revived Bretton Woods System, "NBER Working Paper", 9971, National Bureau of Economic Research, Cambridge, https://doi.org/10.3386/w9971
• Duarte, P., Schnabl, G. (2015), Macroeconomic Policy Making, Exchange Rate Adjustment and Current Account Imbalances in Emerging Markets, "Review of Development Economics", 19 (3), pp. 531-544, https://doi.org/10.1111/rode.12168
• Edwards, S. (2005), Is The U.S. Current Account Deficit Sustainable? If Not, How Costly Is Adjustment Likely To Be?, "Brookings Papers on Economic Activity", 1, pp. 211-288, https://doi.org/10.1353/eca.2005.0018
• Eichengreen, B. (2010), Global Imbalances and the Lessons of Bretton Woods, Cairoli Lectures, The MIT Press, Cambridge.
• Farhi, E., Gourinchas, P.-O., Rey, H. (2011), Reforming the International Monetary System, Centre for Economic Policy Research, London.
• Faruqee, H., Laxton, D., Muir, D., Pesenti, P.A. (2007), Smooth Landing or Crash? Model-Based Scenarios of Global Current Account Rebalancing, [in:] R.H. Clarida (ed.), G7 Current Account Imbalances: Sustainability and Adjustment, University of Chicago Press, Chicago, pp. 377-455, https://www.nber.org/system/files/chapters/c0123/c0123.pdf (accessed: 20.04.2021)
• Federal Reserve Economic Data, Economic Research Division, Federal Reserve Bank of St. Louis, China/U.S. Foreign Exchange Rate (DEXCHUS), https://fred.stlouisfed.org/series/DEXCHUS (accessed: 12.03.2021).
• Feldstein, M.S. (2008), Resolving the Global Imbalance: The Dollar and the U.S. Saving Rate, "NBER Working Paper" No. 13952, National Bureau of Economic Research, Cambridge, https://doi.org/10.3386/w13952
• Ferguson, R.W., Jr. (2005), US current account deficit - causes and consequences, "BIS Review", 27, https://www.bis.org/review/r050422b.pdf (accessed: 21.03.2020).
• Fisher, R.A. (2019), Global Imbalances: A Job for the G20?, "Discussion Paper", 18, German Development Institute, Bonn, https://doi.org/10.23661/dp18.2019
• IMF, Group of Twenty (2019), Global Imbalances, IMF Staff Note, G-20 Finance Ministers and Central Bank Governors" Meetings, June 8-9, Fukuoka, https://www.imf.org/external/np/g20/pdf/2019/060519b.pdf (accessed: 6.10.2021).
• Janicka, M. (2018), Capital flows and External Imbalances in the Eurozone, [in:] S.I. Bukowski (ed.), Monetary Unions. Background, Advantages and Disadvantages, Nova Science Publishers New York, Inc., New York.
• Kolerus, Ch. (2021), What Shapes Current Account Adjustment During Recessions?, "IMF Working Paper", 198, https://www.imf.org/-/media/Files/Publications/WP/2021/English/wpiea2021198-print-pdf.ashx (accessed: 5.10.2021).
• Kregel, J. (2019), Global Imbalances and the Trade War, Policy Note No. 2, Levy Economics Institute of Bard College, Annandale-on-Hudson, https://www.levyinstitute.org/pubs/pn_19_2.pdf (accessed: 6.10.2021).
• Lane, P., Milesi-Ferretti, G.M. (2012), External adjustment and the global crisis, "Journal of International Economics", 88 (2), pp. 252-265, https://doi.org/10.1016/j.jinteco.2011.12.013
• Makin, A.J. (2008), The Inflexible Yuan and Global Imbalances, "Global Economy Journal", 8 (3), https://doi.org/10.2202/1524-5861.1403
• Nasir, M.A., Jackson, K. (2019), An inquiry into exchange rate misalignments as a cause of major global trade imbalances, "Journal of Economic Studies", 46 (4), pp. 902-924, https://doi.org/10.1108/JES-03-2018-0102
• Nier, E.W., Merrouche, O. (2010), What Caused the Global Financial Crisis? Evidence on the Drivers of Financial Imbalances 1999-2007, "IMF Working Paper", 10/265, https://doi.org/10.2139/ssrn.1735474
• Obstfeld, M. (2005), America's Deficit, the World's Problem, Keynote speech prepared for the Twelfth International Conference of the Institute for Monetary and Economic Studies, Bank of Japan, Tokyo, May 30-31, "Monetary and Economic Studies" (Special Edition), 23 (S-1), https://eml.berkeley.edu//~obstfeld/KN_Obstfeld.PDF (accessed: 26.11.2021).
• Obstfeld, M. (2012a), Financial flows, financial crises, and global imbalances, "Journal of International Money and Finance", 31 (3), pp. 469-480, https://doi.org/10.1016/j.jimonfin.2011.10.003
• Obstfeld, M. (2012b), Does the Current Account Still Matter?, "NBER Working Paper", 17877, National Bureau of Economic Research, Cambridge, https://doi.org/10.3386/w17877
• Obsfeld, M., Rogoff, K. (1994), The intertemporal approach to the current account, "NBER Working Paper", 4893, National Bureau of Economic Research, Cambridge, https://doi.org/10.3386/w4893
• Obstfeld, M., Rogoff, K. (2010), Global Imbalances and the Financial Crisis: Products of Common Causes, "CEPR Discussion Paper", DP7606, https://eml.berkeley.edu/~obstfeld/santabarbara.pdf (accessed: 20.03.2019).
• PBC (2021), Purposes and Functions, http://www.pbc.gov.cn/en/3688066/3688080/in dex.html (accessed: 12.03.2021).
• Summers, L.H. (2004), The U.S. Current Account Deficit and the Global Economy, The Per Jacobsson Foundation, Washington, DC, http://www.perjacobsson.org/2004/100304.pdf (accessed: 18.12.2020).
• Tao Yang, D. (2012), Aggregate Savings and External Imbalances in China, "Journal of Economic Perspectives", 26 (4), pp. 125-146, https://doi.org/10.1257/jep.26.4.125
• Williamson, J. (2006), Why capital account convertibility in India is premature?, "Economic & Political Weekly", 41 (19), https://www.epw.in/journal/2006/19/capital-account-convertibility-special-issues-specials/why-capital-account (accessed: 21.04.2019).
• World Economic Outlook Database, 2020, October, https://www.imf.org/en/Publications/WEO/weo-database/2020/October (accessed: 16.03.2021).
• Xafa, M. (2007), Global Imbalances and Financial Stability, "IMF Working Paper", 111, https://doi.org/10.5089/9781451866759.001

Identyfikatory

DOI

10.18778/1508-2008.25.03