International Monetary Fund
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Washington, DC 20431
Information about this author at RePEc
NBER Working Papers and Publications
|May 2007||Smooth Landing or Crash? Model-Based Scenarios of Global Current Account Rebalancing|
with Douglas Laxton, Dirk Muir, Paolo A. Pesenti
in G7 Current Account Imbalances: Sustainability and Adjustment, Richard H. Clarida, editor
|November 2006||Would Protectionism Defuse Global Imbalances and Spur Economic Activity? A Scenario Analysis|
with Douglas Laxton, Dirk Muir, Paolo Pesenti: w12704
In the evolving debate and analysis of global imbalances, a commonly overlooked issue pertains to rising protectionism. This paper attempts to fill that gap, examining the macroeconomic implications of trade policy changes through the lens of a dynamic general equilibrium model of the world economy encompassing four regional blocs. Simulation exercises are carried out to consider the imposition of uniform and discriminatory tariffs on trading partners as well as the case of tariff retaliation. We also discuss a scenario in which a 'globalization backlash' lowers the degree of competition in import-competing sectors, and compare the implications of higher markups in the product and labor markets.
Published: Faruqee, Hamid & Laxton, Douglas & Muir, Dirk & Pesenti, Paolo, 2008. "Would protectionism defuse global imbalances and spur economic activity? A scenario analysis," Journal of Economic Dynamics and Control, Elsevier, vol. 32(8), pages 2651-2689, August. citation courtesy of
|August 2005||Smooth Landing or Crash? Model-Based Scenarios of Global Current Account Rebalancing|
with Douglas Laxton, Dirk Muir, Paolo Pesenti: w11583
This paper re-examines the implications, risks, and attendant policies surrounding global rebalancing of current accounts through the lens of a dynamic, multi-region model of the global economy. In the baseline scenario, world macroeconomic imbalances of the early 2000s can be attributed to a combination of six related but distinct tendencies: (i)expansionary U.S. fiscal policy, (ii) declining rate of U.S. private savings, (iii) increased foreign demand for U.S. assets, particularly in Asia, (iv) strong productivity growth in emerging Asia, (v) lagging productivity growth in Japan and the euro area, and (vi) gaining export competitiveness in emerging Asia. The baseline projects stabilizing U.S. public and foreign debt (albeit at higher levels) and a gradual depreciation of the dollar, allo...