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Global Imbalances: The Role of Emerging Asia
Author(s) -
Cova Pietro,
Pisani Massimiliano,
Rebucci Alessandro
Publication year - 2009
Publication title -
review of international economics
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.513
H-Index - 58
eISSN - 1467-9396
pISSN - 0965-7576
DOI - 10.1111/j.1467-9396.2009.00845.x
Subject(s) - spillover effect , economics , emerging markets , balance of trade , international economics , productivity , net foreign assets , global imbalances , slowdown , current account , general equilibrium theory , east asia , international trade , terms of trade , monetary economics , macroeconomics , china , exchange rate , geography , archaeology , economic growth
This paper investigates the role played by emerging Asia in the emergence and evolution of the global trade imbalances. Based on simulations in a general‐equilibrium model of the world economy, we find that a productivity slowdown in the nontradable sector of these economies in the second half of the 1990s fits regional macroeconomic developments relatively well, but has limited spillover effect to the United States trade balance. In contrast, an increase in the desired level of emerging Asia net foreign assets starting in 2001 not only fits regional developments relatively well, but also has a significant spillover effect to the United States.