Description: Global Fiscal Adjustment and Trade Rebalancing : Global Fiscal Adjustment and Trade Rebalancing

Global Fiscal Adjustment and Trade Rebalancing : Global Fiscal Adjustment and Trade Rebalancing

The emergence of substantial fiscal deficits and a large build up of government debt in major advanced economies will inevitably lead to a period of fiscal consolidation in coming years. In an earlier paper, McKibbin and Stoeckel (2010) explored th...

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Bibliographic Details
Main Authors:	McKibbin, Warwick J., Stoeckel, Andrew B., Lu, YingYing
Language:	English
Published:	World Bank, Washington, DC 2012
Subjects:	ACCOUNTING ADJUSTMENT COSTS ADVANCED COUNTRIES ADVANCED COUNTRY ADVANCED ECONOMIES ADVANCED ECONOMY AFFILIATED ORGANIZATIONS AGGREGATE CONSUMPTION AGGREGATE DEMAND AGGREGATE INVESTMENT AGRICULTURE ASSET PRICE ASSET VALUATION BANK BALANCE SHEETS BANK POLICY BENCHMARK BOND YIELDS BORROWER BUDGET SURPLUS CAPITAL ACCOUNT CAPITAL ACCUMULATION CAPITAL FLOWS CAPITAL INFLOW CAPITAL INFLOWS CAPITAL INVESTMENT CAPITAL OUTFLOW CAPITAL OUTFLOWS CAPITAL RETURN CAPITAL RETURNS CAPITAL STOCK CAPITAL STOCKS CENTRAL BANK CENTRAL BANKS CONSOLIDATION CONSOLIDATIONS CONSUMERS CREDIBILITY CREDIT GROWTH CURRENCY CURRENCY REGIME CURRENT ACCOUNT CURRENT ACCOUNT DEFICITS DEBT DEBT BURDEN DEBT LEVELS DEBT RATIOS DEBT SERVICE DEBTS DECLINE IN INVESTMENT DEPRECIATION DEVELOPING COUNTRIES DEVELOPMENT ECONOMICS DEVELOPMENT POLICY DIMINISHING RETURNS DISPOSABLE INCOME DURABLES ECONOMIC CONDITIONS ECONOMIC CONTRACTION ECONOMIC DEVELOPMENT ECONOMIC GROWTH ECONOMIC OUTCOMES ECONOMIC OUTLOOK ECONOMIC POLICY ECONOMIC RESEARCH ELASTICITY EMERGING ECONOMIES EQUILIBRIUM EURO ZONE EXCHANGE RATE EXCHANGE RATE APPRECIATION EXCHANGE RATE POLICY EXCHANGE RATES EXPANSIONARY MONETARY POLICY EXPECTED RETURNS EXPENDITURE EXPENDITURE INCREASE EXPORTERS EXPORTS FEDERAL RESERVE FINANCIAL ASSETS FINANCIAL CAPITAL FINANCIAL CRISIS FINANCIAL FLOW FISCAL BALANCE FISCAL BALANCES FISCAL CONSOLIDATION FISCAL DEFICIT FISCAL DEFICITS FISCAL DISCIPLINE FISCAL POLICY FISCAL POSITION FOREIGN EXCHANGE FREE BOND GDP GENERAL EQUILIBRIUM GENERAL EQUILIBRIUM MODEL GLOBAL ECONOMY GLOBAL TRADE GOVERNMENT BORROWING GOVERNMENT DEBT GOVERNMENT DEFICIT GOVERNMENT DEFICITS GOVERNMENT EXPENDITURE GOVERNMENT INVESTMENT GOVERNMENT SPENDING GROSS DEBT HOLDING HUMAN CAPITAL IMBALANCE IMBALANCES IMPORTS INCOME LEVELS INFLATION INFLOW OF CAPITAL INFRASTRUCTURE INVESTMENT INFRASTRUCTURE INVESTMENTS INITIAL DEBT INTEREST PAYMENTS INTEREST RATE CHANGES INTEREST RATES INTERNATIONAL BANK INTERNATIONAL ECONOMICS INTERNATIONAL MACROECONOMICS LENDER LEVEL OF DEBT LONG BOND LOOSE MONETARY POLICY MACROECONOMIC ANALYSIS MACROECONOMIC EFFECTS MACROECONOMICS MARGINAL PRODUCT MARKET FAILURE MARKET FORCES MARKET VALUATION MONETARY ECONOMICS MONETARY FUND MONETARY POLICY MONETARY POLICY INDEPENDENCE MULTIPLIERS NATIONAL CURRENCY NET CAPITAL NET EXPORTS NOMINAL EXCHANGE RATE NOMINAL INTEREST RATE NOMINAL INTEREST RATES NOMINAL WAGE OPTIMIZATION OTHER CURRENCIES OUTPUT OUTPUT LOSSES PEG POLITICAL ECONOMY POPULATION GROWTH POSITIVE SPILLOVER PRIVATE CAPITAL PRIVATE INVESTMENT PRIVATE RETURNS PRODUCTIVITY PRODUCTIVITY GROWTH PUBLIC BORROWING PUBLIC DEBT PUBLIC DEFICITS PUBLIC EXPENDITURE RATE OF RETURN RATES OF RETURN REAL EXCHANGE RATES REAL GDP REAL INTEREST REAL INTEREST RATES RECESSION RETURN RISK PREMIUMS SAVINGS SHORT INTEREST SOVEREIGN BOND SOVEREIGN RISK STEADY STATE STOCK CHANGE STOCK DATA TAX TAX LIABILITIES TELECOMMUNICATIONS TRADE BALANCE TRADE BALANCES TRADE BARRIER TRADE DEFICIT TRADE PATTERNS TRADE PROTECTION TRADE SURPLUSES TRUSTEES UNEMPLOYMENT VALUE ADDED WEALTH WORLD ECONOMY
Online Access:	http://documents.worldbank.org/curated/en/2012/04/16235041/global-fiscal-adjustment-trade-rebalancing-global-fiscal-adjustment-trade-rebalancing http://hdl.handle.net/10986/6047

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Summary:	The emergence of substantial fiscal deficits and a large build up of government debt in major advanced economies will inevitably lead to a period of fiscal consolidation in coming years. In an earlier paper, McKibbin and Stoeckel (2010) explored the effects of this fiscal adjustment in advanced economies on the global economic outlook. This paper focuses on the differences between the impacts of fiscal policy in advanced versus emerging economies. In particular, the need for more fiscal spending on infrastructure in emerging economies and the need for fiscal consolidation in advanced economies leads naturally to the question of what this asymmetric fiscal adjustment might do to global trade balances as well as global economic growth over the coming decades. The adjustment needed in both regions is substantial and the asymmetry of the adjustment implies important consequences for trade and capital flows between regions as well as asset price adjustments within and between regions.

Global Fiscal Adjustment and Trade Rebalancing : Global Fiscal Adjustment and Trade Rebalancing

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