scholarly journals Assessment of Feldstein’s ‘Global Imbalance'

2021 ◽  
Vol 1 (15) ◽  
pp. 125-137
Author(s):  
Pawel Mlodkowski
Keyword(s):  
Systematic Review ◽  
Empirical Evidence ◽  
Open Economy ◽  
Global Economy ◽  
Trade Deficit ◽  
Alternative Interpretation ◽  
Political Debate ◽  
Hard Data ◽  
Savings Rate ◽  
The U.S

This note is a systematic review of arguments provided by Feldstein (2008) on the necessity for global readjustments, both in the U.S. and in main trading partners. The purpose is to address the main arguments in the scientific and political debate on persistent To date, there has been no publication that challenged the opinions leading to totally wrong forecasts concerning the global imbalance. With a perspective of more than 10 years of post-2008-crisis developments, and together with empirical evidence one can easily see how erroneous were the arguments formulated in 2008. The tasks included a systematic review of all arguments formulated by Martin Feldstein in 2008, and casting them against empirical evidence. The U.S. current account (CA) deficit has continued for many years, since 1982, and has not changed, as foreseen by Feldstein. The primary method is a simple comparative analysis, supported by basic macroeconomic data. They allow to reveal multiple processes leading to further deterioration of the U.S. trade balance. Neither savings rate domestically nor abroad adjusted to give a basis for solving the global imbalance. In the same time, all traditional arguments presented on global imbalances seem undeniable. However, an alternative interpretation of the imbalance does not recognize the CA deficit as “a gift to the U.S. economy”. This paper sheds new light on the “global imbalance”, suggesting that increasing domestic absorption by China may be an important factor in resolving the U.S. problematic and persistent trade deficit. Disaster-scenarios may be not there in the U.S. to experience. Future developments may be far from those announced, and previously expected by Feldstein in his seminal paper. A careful reader may conclude that all coming changes and adjustments will be slow, gradual, and will not cause any major issues in the global economy. Such conclusions seem most justified by hard data and therefore encouraging. As the topic remains central to open economy empirical macroeconomics, continuation of studies on this issue seems natural. The U.S. and China will remain the biggest economies, and, as such, they are central to the global situation.

scholarly journals Discussion on the Impact of Sino-US Trade War on Taiwanese Manufacturing

2019 ◽  
Vol 14 (7) ◽  
pp. 70
Author(s):  
Jui-Lung Chen
Keyword(s):  
Global Economy ◽  
Dispute Settlement ◽  
Trade Deficit ◽  
Dispute Settlement Mechanism ◽  
Wto Dispute Settlement ◽  
Belt And Road ◽  
Trade Frictions ◽  
Trade War ◽  
The Impact ◽  
The U.S

When US President Donald Trump signed the Section 301 Investigation in March 2018, the Sino-US trade war intensified, exerting a great impact on the global economy. The Trump Administration recently has piled up the economic and trade pressure on China, while China seeks to resort to the WTO dispute settlement mechanism and break the siege imposed by the trade war through the "Belt and Road Initiative". US launched a trade war against China due mainly to the huge trade deficit with China, and the trade frictions between the U.S. and China have caused turbulence on the Asian and global industrial chains. Therefore, by analyzing the recent trade conflicts between the U.S. and China and the responses given by both respectively, this paper explores the possible impact on Taiwan's manufacturing and its potential response.

scholarly journals Resolving the Global Imbalance: The Dollar and the U.S. Saving Rate

2008 ◽  
Vol 22 (3) ◽  
pp. 113-125 ◽  
Author(s):  
Martin Feldstein
Keyword(s):  
Current Account ◽  
Global Economy ◽  
Current Account Deficit ◽  
Aggregate Demand ◽  
Trade Deficit ◽  
Saving Rate ◽  
Trade Surplus ◽  
Trading Partners ◽  
Foreign Governments ◽  
The U.S

The massive deficit in the U.S. trade and current accounts is one of the most striking features of the current global economy and, to some observers, one of the most worrying. Although the current account deficit finally began to shrink in 2007, it remained at more than 5 percent of GDP—more than $700 billion. While some observers claim that the U.S. economy can continue to have trade deficits of this magnitude for years—some would say for decades—into the future, I believe that such enormous deficits cannot continue and will decline significantly in the coming years. This paper discusses the reasons for that decline and the changes that are needed in the U.S. saving rate and in the value of the dollar to bring it about. Reducing the U.S. current account deficit does not require action by the U.S. government or by the governments of America's trading partners. Market forces alone will cause the U.S. trade deficit to decline further. In practice, however, changes in government policies at home and abroad may lead to faster reductions in the U.S. trade deficit. More important, the response of the U.S. and foreign governments and central banks will determine the way in which the global economy as a whole adjusts to the decline in the U.S. trade deficit. Reductions in the U.S. current account deficit will of course imply lower aggregate trade surpluses in the rest of the world. Taken by itself, a reduction in any country's trade surplus will reduce aggregate demand and therefore employment in that country. I will therefore look at what other countries—China, Japan, and European countries—can do to avoid the adverse consequences of the inevitable decline of the U.S. trade deficit.

scholarly journals Statistical Modeling of the Large Open Economy of the U.S.

2017 ◽  
pp. 20-26
Author(s):  
О. М. Simachova
Keyword(s):  
Open Economy ◽  
Global Economy ◽  
Market Model ◽  
Strong Impact ◽  
Economic Relations ◽  
Political Interests ◽  
Macroeconomic Indicators ◽  
Multifactor Regression ◽  
American Economy ◽  
The U.S

The open economy phenomenon draws close attention of researchers in the era of global economy and trans-nationalization of international economic relations. Along with strong impact on international market and global interest rate, such economies are capable to have significant effects for global conjuncture and determine global factors of economic development. Main sources of strength of the American economy are analyzed (rich natural and human resources, strong relations with permanent and reliable trade partners and neighboring countries, the largest financial system and the most reliable world currency). It is argued that large companies accounting for a major part of the total foreign direct investment of the U.S. are the fundament for the American economy and the main conduit of the country’s economic and political interests. Selected macroeconomic indicators of the U.S. are analyzed, to make economic diagnostics of the current performance of the American economy The statistical multifactor regression model built by the method of least squares is proposed. Results of the analysis demonstrate negative statistical impact of unemployment and increasing energy dependence on GDP by PPP, and positive statistical impact of household consumption on future development of the American economy It is argued that given the difficult political and economic situation in Ukraine, scientists should examine best practices of leading countries of the world in issues of economic balancing and sources of economic growth, to elaborate reasonable recommendations with due consideration to national specifics. The American economy is a good example of market model operation in 21 century.

scholarly journals A Legal and Economic Critique of President Trump's China Trade Policies

2018 ◽  
Vol 79 (2) ◽  
Author(s):  
Daniel C.K. Chow ◽  
William McGuire ◽  
Ian Sheldon
Keyword(s):  
Global Economy ◽  
Trade Deficit ◽  
Legal Analysis ◽  
Legal Regime ◽  
Currency Devaluation ◽  
China Trade ◽  
Legal Perspective ◽  
Trade Sanctions ◽  
The U.S

The administration of President Donald J. Trump has warned that it supports an aggressive across the board tariff of 45% on all imports from China to neutralize the effects of China’s currency manipulation. However, such a tariff cannot withstand an economic and legal analysis. Fundamental economic principles indicate that China’s alleged currency devaluation cannot create a real long-term trade advantage and that the effects of currency devaluation have no real effect on the U.S.-China trade balance. Not only is currency manipulation not a cause of the U.S. trade deficit with China but the proposed remedy of a draconian 45% tariff will only create a grievous self-inflicted wound on the U.S. and global economy. From a legal perspective, a 45% tariff cannot be justified under the legal regime of the World Trade Organization as such a tariff runs afoul of the tightly regulated regime of authorized trade sanctions. As the proposed tariff cannot be justified from a legal or economic perspective it is not an advisable or appropriate response to China’s trade practices.

Media Malaise and the Decline of Legitimacy

2017 ◽  
Author(s):  
Peter Van Aelst
Keyword(s):  
Systematic Review ◽  
Empirical Evidence ◽  
Media Coverage ◽  
News Coverage ◽  
Political Support ◽  
Level Of Education ◽  
Political News ◽  
Negative Tone ◽  
Election News ◽  
Over Time

This chapter analyzes media malaise theories and their consequences for legitimacy. These theories argue that the increasing availability of information through new and old media and increasingly negative tone of media are to blame for declining legitimacy. The chapter examines these claims by providing a systematic review of empirical research on media and political support. It first investigates whether news coverage has become more negative over time, and then examines the micro process that might explain the link between media coverage and political support. Empirical evidence suggests that where coverage has become more negative, this occurred before the 1990s and has levelled off since, and is concentrated primarily in election news. Negative political news does have a modest impact on political support once controlled for level of education, but that effect can be positive and negative, depending on the medium, the receiver, and the indicator of political support.

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