| ID | 130971 |
| Title Proper | Global and Euro imbalances |
| Other Title Information | China and Germany |
| Language | ENG |
| Author | Ma, Guonan ; McCauley, Robert N |
| Publication | 2014. |
| Summary / Abstract (Note) | We analyze global and euro area imbalances by focusing on China and Germany as large surplus and creditor countries. In the 2000s, domestic reforms expanded the effective labor force, restrained wages, shifted income toward profits and increased corporate saving. As a result, the Chinese and German current account surpluses widened, and that of Germany has proven more persistent, with subdued domestic investment. China is an early-stage creditor, holding a short equity position and a long position in safe debt. Germany's balanced net debt and equity claims mark it as a mature creditor that provides insurance to the rest of the world. China pays to lay off equity risk, while Germany, by contrast, harvests a moderate yield on its net claims. In both economies, the shortfall of the net international investment position from cumulated current account surpluses arises from exchange rate changes, asymmetric valuation gains, and, in Germany's case, credit losses. |
| `In' analytical Note | China and World Economy Vol.22, No.1; January-February 2014: p.1-29 |
| Journal Source | China and World Economy Vol.22, No.1; January-February 2014: p.1-29 |
| Key Words | Euro ; European Currency - Euro ; Global Currency ; China ; Germany ; Economic Cooperation ; Euro Imbalances ; Monetary Balance ; Economic Reforms ; Asymmetric Valuation ; Austerity Measures ; Wage and Income ; Labour Problems ; Distribution ; International Investment ; FDI ; Economic Growth ; German Economy ; Chinese Economy |