GLOBAL IMBALANCES AND THEIR EVOLUTION DURING THE CURRENT CRISIS

  • PAVEL HNÁT

Abstract

The current crisis has further revealed a systemic problem of the contemporary global economy that lies in imbalances between savings and investment in the major world economies reflected in large and growing current
account imbalances. Even though global imbalances are not a new phenomenon, their new features since the early 2000's have induced many debates
about their role in triggering the current crisis and their impact on global
economic governance. The aim of this paper is to explain global imbalances
as an outcome of trade and financial globalization combined with longstanding policy challenges that were not reflected enough before the current
crisis and to analyze their evolution during the crisis. The paper suggests that
policy failures that fuelled the current crisis cannot be fixed without facing
the causes of global imbalances from a more coordinated perspective than so
far. Since the risk of further widening of global imbalances prevails, global
financial governance must strengthen surveillance in order to enable such a
coordinated approach.

Published
2020-08-23
How to Cite
HNÁT, P. (2020). GLOBAL IMBALANCES AND THEIR EVOLUTION DURING THE CURRENT CRISIS. Köz-Gazdaság - Review of Economic Theory and Policy, 6(4), 95-110. Retrieved from https://retp.eu/index.php/retp/article/view/783