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Current account deficits imply increasing liabilities to the rest of the world. External sustainability then depends on whether these can be met in the future without defaulting, i.e., normally through trade account surpluses. To run such surpluses without a fall in consumption, capital inflows should be used to increase future output. This paper tentatively finds that current account deficits reversals that follow investment booms are marked by better growth performance than those following consumption booms. It also shows that many recent large current account deficits have been predominantly the result of consumption or non-productive investment booms.
Saving and investment. --- Business cycles. --- Economic cycles --- Economic fluctuations --- Cycles --- Accumulation, Capital --- Capital accumulation --- Capital formation --- Investment and saving --- Saving and thrift --- Capital --- Supply-side economics --- Wealth --- Investments --- Exports and Imports --- Macroeconomics --- Current Account Adjustment --- Short-term Capital Movements --- Macroeconomics: Consumption --- Saving --- Fiscal Policy --- International economics --- Current account deficits --- Current account --- Consumption --- Current account imbalances --- Current account surpluses --- Balance of payments --- National accounts --- Economics --- Spain
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This book examines imbalances in seven major economies: China, France, Germany, India, Japan, the United Kingdom, and the United States, evaluating key indicators agreed on by the G20 for identifying large imbalances, including public and private debt and private saving, and countries external position. The chapters describe a suite of corrective steps tailored for each country that, if implemented, could improve prospective economic outcomes, creating sustainable and balanced growth for these economies and serving as a model for other G20 countries.
Economic policy --- Economic development --- Financial crises --- Global Financial Crisis, 2008-2009 --- Equilibrium (Economics) --- Balance of trade --- Debts, External --- Business & Economics --- Economic Theory --- Prevention --- Economic policy. --- Economic development. --- Balance of trade. --- Debts, External. --- Prevention. --- Debts, Foreign --- Debts, International --- External debts --- Foreign debts --- International debts --- Deficits, Trade --- Trade, Balance of --- Trade balance --- Trade deficits --- Trade surpluses --- Surpluses, Trade --- Disequilibrium (Economics) --- Economic equilibrium --- General equilibrium (Economics) --- Partial equilibrium (Economics) --- Crashes, Financial --- Crises, Financial --- Financial crashes --- Financial panics --- Panics (Finance) --- Stock exchange crashes --- Stock market panics --- Development, Economic --- Economic growth --- Growth, Economic --- Economic nationalism --- Economic planning --- National planning --- State planning --- Debt --- International finance --- Investments, Foreign --- International trade --- Balance of payments --- Mercantile system --- Payment --- DGE (Economics) --- DSGE (Economics) --- Dynamic stochastic general equilibrium (Economics) --- SDGE (Economic theory) --- Economics --- Statics and dynamics (Social sciences) --- Crises --- Development economics --- Resource curse --- Planning --- National security --- Social policy --- Global Financial Crisis (2008-2009) --- E-books --- Global Economic Crisis, 2008-2009 --- Subprime Mortgage Crisis, 2008-2009 --- Exports and Imports --- Macroeconomics --- Public Finance --- Industries: Financial Services --- Production and Operations Management --- Labor --- Debt Management --- Sovereign Debt --- Current Account Adjustment --- Short-term Capital Movements --- Fiscal Policy --- Taxation, Subsidies, and Revenue: General --- National Government Expenditures and Related Policies: General --- Public finance & taxation --- International economics --- Labour --- income economics --- Currency --- Foreign exchange --- Public debt --- Current account surpluses --- Current account deficits --- Fiscal consolidation --- Revenue administration --- Fiscal policy --- Debts, Public --- Revenue --- Expenditures, Public --- United States --- Income economics
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