Global Imbalances: Is Germany the new China? A Skeptical View

Joshua Aizenman and Rajeswari Sengupta

Santa Cruz Department of Economics, Working Paper Series from Department of Economics, UC Santa Cruz

Abstract: In this paper we evaluate the current account patterns of China and Germany. Wepoint out that China's current account surplus as a share of global GDP in recent yearsresembles that of Germany’s. Yet, an important difference is that the Euro block’scurrent account inclusive of Germany has overall been balanced, whereas emergingAsia's current account inclusive of China has mostly been characterized by sizablesurpluses. We further find that both China and Germany's current account surplusesseem to be accounted for by common factors. However we have reasons to doubt thelong run viability of these current account trends in future decades. Demographictransitions in China and Germany are projected to reduce their surpluses, and thiseffect is stronger for Germany. We also discuss plausible reasons to doubt the extentto which the Euro block will move towards significant surplus in the coming years.

Keywords: Social and Behavioral Sciences; current accounts; demographic transitions; global imbalances (search for similar items in EconPapers)
Date: 2010-12-08
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

Downloads: (external link)
https://www.escholarship.org/uc/item/3zx245jn.pdf;origin=repeccitec (application/pdf)

Related works:
Journal Article: Global Imbalances: Is Germany the New China? A Skeptical View (2011)
Working Paper: Global imbalances: Is Germany the new China? A skeptical view (2010)
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:cdl:ucscec:qt3zx245jn

Access Statistics for this paper

More papers in Santa Cruz Department of Economics, Working Paper Series from Department of Economics, UC Santa Cruz Contact information at EDIRC.
Bibliographic data for series maintained by Lisa Schiff (help@escholarship.org).