The Global Recession Risk

Carlos M. Peláez and Carlos A. Peláez

Chapter 11 in Government Intervention in Globalization, 2008, pp 167-181 from Palgrave Macmillan

Abstract: Abstract The world economy is threatened with recession by the debt/dollar crisis. The dollar problem originates in the fact that the US has been absorbing two-thirds of world savings to finance its deficit in current account. The dollar has to devalue, cheapening exports with which to reduce the trade deficit. The debt problem was caused by the lowering by the Fed of the fed funds rate to 1 percent in 2003–4, which encouraged excessive investment in residential construction. The US economy has to reallocate its resources to producing goods for exporting. The CAD as percent of GDP began in 2007 its first decline since 1997. Several sections consider the US external deficit, the trigger of the debt crisis, the need of repairing the international financial system and the ominous threat of regulatory, trade and exchange wars.

Keywords: Monetary Policy; Central Bank; Current Account; Great Depression; Import Price (search for similar items in EconPapers)
Date: 2008
References: Add references at CitEc
Citations:

There are no downloads for this item, see the EconPapers FAQ for hints about obtaining it.

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:pal:palchp:978-0-230-22834-4_12

Ordering information: This item can be ordered from
http://www.palgrave.com/9780230228344

DOI: 10.1057/9780230228344_12

Access Statistics for this chapter

More chapters in Palgrave Macmillan Books from Palgrave Macmillan
Bibliographic data for series maintained by Sonal Shukla () and Springer Nature Abstracting and Indexing ().