Global Imbalances, Bretton Woods II, and Euroland’s Role in All This

Jörg Bibow

Chapter 1 in Euroland and the World Economy, 2007, pp 15-42 from Palgrave Macmillan

Abstract: Abstract Approaching the issue of mounting global imbalances through the angle of the ‘Bretton Woods II hypothesis’ (BWII), this chapter sets out to investigate Euroland’s role in particular. It is argued that popular preoccupations with the US’s ‘twin-deficit’ and China’s ‘beggar-thy-neighbour’ (renminbi) undervaluation only scratch the surface of what are really the consequences of a rather complex set of causes and developments. Systemic deficiencies in the global monetary order that induce the developing world to run current account surpluses and accumulate dollar reserves is one factor. Japan’s and Germany’s protracted domestic demand stagnation is another. Germany’s key role somehow disappeared with the shift in focus on Euroland as a whole, and Euroland’s role, in turn, was written out of the play when the oil price boom turned the area’s current account surplus into a small deficit. It is erroneous to ignore the global ramifications of protracted domestic demand stagnation in an economic area similar in size to the United States. Just as it is hypocritical to bark at China’s external surplus which really only attained a globally significant role over the last couple of years — while the US external deficit has built up continuously since the early 1990s.

Keywords: Current Account; Euro Area; Domestic Demand; Current Account Deficit; Foreign Direct Investment Inflow (search for similar items in EconPapers)
Date: 2007
References: Add references at CitEc
Citations: View citations in EconPapers (4)

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

Related works:
Working Paper: Global Imbalances, Bretton Woods II, and Euroland's Role in All This (2006)
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:978-0-230-37755-4_2

Ordering information: This item can be ordered from
http://www.palgrave.com/9780230377554

DOI: 10.1057/9780230377554_2

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 ().