Global Imbalance: A Policy Mishap or a Rational Outcome? The Case of Korea

Il Houng Lee
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Il Houng Lee: Korea Institute for International Economic Policy

No 15-8, World Economy Brief from Korea Institute for International Economic Policy

Abstract: Among multitude of issues, global imbalance has attracted more attention than may be warranted because it is perceived to be policy induced and constrain global growth, or a zero sum game in the sense of growing at another countries' expense. Yet many of those with a current account surplus face a rapidly aging population that motivates high savings to ensure consumption smoothing. Those with a deficit, on the other hand, may need to be there for the opposite reason. Thus, a current account imbalance could be a rational market outcome, rather than a policy induced market distortion.

Keywords: Global-Imbalance (search for similar items in EconPapers)
Pages: 7 pages
Date: 2015-04-16
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Persistent link: https://EconPapers.repec.org/RePEc:ris:kiepwe:2015_008

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