IDEAS home Printed from https://ideas.repec.org/a/eee/ecolet/v145y2016icp69-72.html
   My bibliography  Save this article

Global imbalances in the XIX, XX and the XXI centuries

Author

Listed:
  • Eugeni, Sara

Abstract

We establish a new stylized fact: while the current account and the trade balances are positively correlated during the second globalization (1990s–2010s), they were negatively correlated during the first globalization (1870s–1910s). We show that the reason behind is that the world interest rate is currently low relatively to the world growth rate due to a “global saving glut”, while this was not the case during the first globalization.

Suggested Citation

  • Eugeni, Sara, 2016. "Global imbalances in the XIX, XX and the XXI centuries," Economics Letters, Elsevier, vol. 145(C), pages 69-72.
    • Handle: RePEc:eee:ecolet:v:145:y:2016:i:c:p:69-72
    DOI: 10.1016/j.econlet.2016.05.018
    as

    Download full text from publisher

    File URL: http://www.sciencedirect.com/science/article/pii/S0165176516301744
    Download Restriction: Full text for ScienceDirect subscribers only
    File URL: https://libkey.io/10.1016/j.econlet.2016.05.018?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    References listed on IDEAS

    as
    1. Thomas Piketty & Gabriel Zucman, 2014. "Capital is Back: Wealth-Income Ratios in Rich Countries 1700–2010," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 129(3), pages 1255-1310.
    2. Gale, David, 1971. "General equilibrium with imbalance of trade," Journal of International Economics, Elsevier, vol. 1(2), pages 141-158, May.
    3. Obstfeld,Maurice & Taylor,Alan M., 2005. "Global Capital Markets," Cambridge Books, Cambridge University Press, number 9780521671798, October.
    4. Buiter, Willem H, 1981. "Time Preference and International Lending and Borrowing in an Overlapping-Generations Model," Journal of Political Economy, University of Chicago Press, vol. 89(4), pages 769-797, August.
    5. Eugeni, Sara, 2015. "An OLG model of global imbalances," Journal of International Economics, Elsevier, vol. 95(1), pages 83-97.
    6. Lane, Philip R. & Milesi-Ferretti, Gian Maria, 2007. "The external wealth of nations mark II: Revised and extended estimates of foreign assets and liabilities, 1970-2004," Journal of International Economics, Elsevier, vol. 73(2), pages 223-250, November.
    7. Ben S. Bernanke, 2005. "The global saving glut and the U.S. current account deficit," Speech 77, Board of Governors of the Federal Reserve System (U.S.).
    8. Lane, Philip & Milesi-Ferretti, Gian Maria, "undated". "External Wealth of Nations," Instructional Stata datasets for econometrics extwealth, Boston College Department of Economics.
    9. repec:fip:fedgsq:y:2005:i:mar10 is not listed on IDEAS
    10. Gale, David, 1974. "The trade imbalance story," Journal of International Economics, Elsevier, vol. 4(2), pages 119-137, May.
    11. repec:hal:pseose:halshs-01109372 is not listed on IDEAS
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Mariolis Theodore & Konstantakis Konstantinos N. & Michaelides Panayotis G. & Tsionas Efthymios G., 2019. "A non-linear Keynesian Goodwin-type endogenous model of the cycle: Bayesian evidence for the USA," Studies in Nonlinear Dynamics & Econometrics, De Gruyter, vol. 23(1), pages 1-16, February.
    2. Esteves, Rui & Eichengreen, Barry, 2019. "The Trials of the Trilemma: International Finance 1870-2017," CEPR Discussion Papers 13465, C.E.P.R. Discussion Papers.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Eugeni, Sara, 2015. "An OLG model of global imbalances," Journal of International Economics, Elsevier, vol. 95(1), pages 83-97.
    2. Bárány, Zsófia L. & Coeurdacier, Nicolas & Guibaud, Stéphane, 2023. "Capital flows in an aging world," Journal of International Economics, Elsevier, vol. 140(C).
    3. Gourinchas, Pierre-Olivier & Rey, Hélène, 2014. "External Adjustment, Global Imbalances, Valuation Effects," Handbook of International Economics, in: Gopinath, G. & Helpman, . & Rogoff, K. (ed.), Handbook of International Economics, edition 1, volume 4, chapter 0, pages 585-645, Elsevier.
    4. repec:grz:wpaper:2016-05 is not listed on IDEAS
    5. repec:spo:wpmain:info:hdl:2441/1evugr7cvq8naonad7623t1rbv is not listed on IDEAS
    6. Karl Farmer & Irina Ban, 2017. "Modeling Financial Integration, Intra-EMU and Asian-US External Imbalances," International Advances in Economic Research, Springer;International Atlantic Economic Society, vol. 23(3), pages 261-281, August.
    7. Coulibaly, Dramane & Gnimassoun, Blaise & Mignon, Valérie, 2020. "The tale of two international phenomena: Migration and global imbalances," Journal of Macroeconomics, Elsevier, vol. 66(C).
    8. repec:grz:wpaper:2014-06 is not listed on IDEAS
    9. repec:grz:wpaper:2015-08 is not listed on IDEAS
    10. Karl Farmer, 2016. "The Intertemporal Equilibrium Modeling of Intra-EMU and Global Trade Imbalances," International Advances in Economic Research, Springer;International Atlantic Economic Society, vol. 22(4), pages 377-395, November.
    11. repec:hal:spmain:info:hdl:2441/1evugr7cvq8naonad7623t1rbv is not listed on IDEAS
    12. Linda S Goldberg, 2009. "Understanding Banking Sector Globalization," IMF Staff Papers, Palgrave Macmillan, vol. 56(1), pages 171-197, April.
    13. Herrmann, Sabine & Kleinert, Jörn, 2014. "Lucas paradox and allocation puzzle: Is the euro area different?," Discussion Papers 06/2014, Deutsche Bundesbank.
    14. Dramane Coulibaly & Blaise Gnimassoun & Valérie Mignon, 2018. "The tale of two international phenomena: International migration and global imbalances," Working Papers 2018-02, CEPII research center.
    15. Bordo, Michael D. & Meissner, Christopher M. & Stuckler, David, 2010. "Foreign currency debt, financial crises and economic growth: A long-run view," Journal of International Money and Finance, Elsevier, vol. 29(4), pages 642-665, June.
    16. Rishabh Kumar, 2019. "The evolution of wealth-income ratios in India, 1860-2012," Working Papers hal-02876998, HAL.
    17. Mehmet Fatih Ekinci & Şebnem Kalemli-Özcan & Bent E. Sørensen, 2009. "Financial Integration within EU Countries: The Role of Institutions, Confidence and Trust," NBER Chapters, in: NBER International Seminar on Macroeconomics 2007, pages 325-391, National Bureau of Economic Research, Inc.
    18. Yongsung Chang & Sun-Bin Kim & Jaewoo Lee, 2013. "Accounting for Global Dispersion of Current Accounts," Review of Economic Dynamics, Elsevier for the Society for Economic Dynamics, vol. 16(3), pages 477-496, July.
    19. Hur, Sewon & Kondo, Illenin O., 2016. "A theory of rollover risk, sudden stops, and foreign reserves," Journal of International Economics, Elsevier, vol. 103(C), pages 44-63.
    20. Broner, Fernando & Didier, Tatiana & Schmukler, Sergio L. & von Peter, Goetz, 2023. "Bilateral international investments: The big sur?," Journal of International Economics, Elsevier, vol. 145(C).
    21. Laura Alfaro & Sebnem Kalemli-Ozcan & Vadym Volosovych, 2014. "Sovereigns, Upstream Capital Flows, And Global Imbalances," Journal of the European Economic Association, European Economic Association, vol. 12(5), pages 1240-1284, October.
    22. Phelan, Gregory & Toda, Alexis Akira, 2019. "Securitized markets, international capital flows, and global welfare," Journal of Financial Economics, Elsevier, vol. 131(3), pages 571-592.
    23. Kose, M. Ayhan & Prasad, Eswar & Rogoff, Kenneth & Wei, Shang-Jin, 2010. "Financial Globalization and Economic Policies," Handbook of Development Economics, in: Dani Rodrik & Mark Rosenzweig (ed.), Handbook of Development Economics, edition 1, volume 5, chapter 0, pages 4283-4359, Elsevier.
    24. Herrmann, Sabine & Winkler, Adalbert, 2009. "Real convergence, financial markets, and the current account - Emerging Europe versus emerging Asia," The North American Journal of Economics and Finance, Elsevier, vol. 20(2), pages 100-123, August.
    25. Navarro-Ortiz, Josep & Sapena, Juan, 2020. "Is external debt sustainable? A probabilistic approach," Economic Modelling, Elsevier, vol. 93(C), pages 142-153.

    More about this item

    Keywords

    Trade imbalances; First globalization; Global saving glut; Dynamic inefficiency; OLG models;
    All these keywords.

    JEL classification:

    • F2 - International Economics - - International Factor Movements and International Business
    • F4 - International Economics - - Macroeconomic Aspects of International Trade and Finance

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:eee:ecolet:v:145:y:2016:i:c:p:69-72. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Catherine Liu (email available below). General contact details of provider: http://www.elsevier.com/locate/ecolet .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.