Bibliotheken Online

The great rebalancing

trade, conflict, and the perilous road ahead for the world economy

Michael Pettis

Buch

englisch

Pettis, Michael (Verfasser/-in) DNB

Princeton University Press

Princeton, N.J. [u.a.]

2013

IX, 219 p.

978-0-691-15868-6

includes bibliographical references and index.

world economy
international trade
international economic relations
balance of trade
financial crisis

Summary:

China's economic growth is sputtering, the Euro is under threat, and the United States is combating serious trade disadvantages. Another Great Depression? Not quite. Noted economist and China expert Michael Pettis argues instead that we are undergoing a critical rebalancing of the world economies. Debunking popular misconceptions, Pettis shows that severe trade imbalances spurred on the recent financial crisis and were the result of unfortunate policies that distorted the savings and consumption patterns of certain nations. Pettis examines the reasons behind these destabilizing policies, and he predicts severe economic dislocations--a lost decade for China, the breaking of the Euro, and a receding of the U.S. dollar--that will have long-lasting effects. Pettis explains how China has maintained massive--but unsustainable--investment growth by artificially lowering the cost of capital. He discusses how Germany is endangering the Euro by favoring its own development at the expense of its neighbors. And he looks at how the U.S. dollar's role as the world's reserve currency burdens America's economy. Although various imbalances may seem unrelated, Pettis shows that all of them--including the U.S. consumption binge, surging debt in Europe, China's investment orgy, Japan's long stagnation, and the commodity boom in Latin America--are closely tied together, and that it will be impossible to resolve any issue without forcing a resolution for all. Demonstrating how economic policies can carry negative repercussions the world over, The Great Rebalancing sheds urgent light on our globally linked economic future.

Table of Contents:

Terms of Use
Chapter 1Trade Imbalances and the Global Financial Crisisp. 1
Underconsumptionp. 4
The Different Explanations of Trade Imbalancep. 6
Destabilizing Imbalancesp. 9
We Have the Toolsp. 11
Why the Confusion?p. 14
Some Accounting Identitiesp. 17
The Inanity of Moralizingp. 19
The New Economic Writingp. 22
Chapter 2How Does Trade Intervention Work?p. 26
Trade Intervention Affects the Savings Ratep. 29
Currency Manipulationp. 32
Exporting Capital Means Importing Demandp. 34
What Happens If China Revalues the Renminbi?p. 37
Wealth Is Transferred within Chinap. 40
Does China Need a Social Safety Net?p. 42
Chapter 3The Many Forms of Trade Interventionp. 47
How Changes in Wealth Affect Savingsp. 50
Wage Growthp. 52
Trade Policy as the Implicit Consequence of Transfersp. 55
Financial Repressionp. 58
Higher Interest Rates and Household Wealthp. 61
Do Higher Interest Rates Stimulate or Reduce Consumption?p. 64
Currency versus Interest Ratesp. 66
Chapter 4The Case of Unbalanced Growth in Chinap. 69
What Kind of Imbalance?p. 74
Growth Miracles Are Not Newp. 78
The Brazilian Miraclep. 81
Powering Growthp. 84
Paying for Subsidiesp. 87
Limits to Backwardnessp. 89
The Trade Impactp. 92
A Lost Decade?p. 94
Can China Manage the Transition More Efficiently?p. 96
Some More Misconceptionsp. 97
Chapter 5The Other Side of the Imbalancesp. 100
Can Europe Change American Savings Rates?p. 103
How Does Trade Rebalance?p. 106
Globalization Is Not Bilateralp. 109
The Global Shopping Spreep. 113
Trade Remains Unbalancedp. 115
Chapter 6The Case of Europep. 119
The Mechanics of Crisisp. 122
Too Latep. 125
German Thriftp. 128
Forcing Germany to Adjustp. 131
Two-Sided Adjustmentp. 133
Chapter 7Foreign Capital, Go Home!p. 136
Swapping Assetsp. 139
It's about Trade, Not Capitalp. 142
Trade Imbalances Lead to Debt Imbalancesp. 144
The Current Account Dilemmap. 147
Chapter 8The Exorbitant Burdenp. 150
Why Buy Dollars?p. 153
It Is Better to Give Than to Receivep. 157
Foreigners Fund Current Account Deficits, Not Fiscal Deficitsp. 161
Rebalancing the Scalesp. 163
When Are Net Capital Inflows a Good Thing?p. 166
Can We Live without the Dollar?p. 168
Why Not Use SDRs?p. 172
An American Push Away from Exorbitant Privilegep. 174
Chapter 9When Will the Global Crisis End?p. 178
Transferring the Center of the Crisisp. 180
Reversing the Rebalancingp. 183
Some Predictionsp. 185
The Global Impactp. 191
Notesp. 197
Indexp. 205

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