Global Imbalances in Trade and Finance: Issues and Perspectives

$28.80

$32.00

In stock

Free & Quick Delivery Worldwide

Emerging economies, traditionally recipients of foreign capital, have now become the chief suppliers of capital that has become crucial in financing the large and growing current account deficit of the US inexpensively.The USâ€™ current account deficit has crossed 6.7 percent of its GDP. Its fiscal deficit is at over 4 percent level. Any other nation would have collapsed economically under the weight of the twin deficits but not the US, because of the very special key currency status the greenback enjoys. If the pernicious drift towards fiscal instability in the US and elsewhere is not arrested and is compounded by a protectionist reversal of globalization, the adjustment process could be quite painful for the world economy.As long as Asian nations do not enhance domestic investments, let their currencies attain the real values and not implement vital structural reforms especially labor reforms, the dollar hegemony is destined to persist. The US need not proactively initiate any reforms, but can believe in gradualism, so that the greenback only undergoes slow and gradual depreciation, a soft landing without any disaster.The world may very soon witness oil and other major commodities being invoiced in non-dollar currency. This way, the US may be forced to correct its macroeconomic imbalances sooner than later. The rest of the world, therefore, needs to work in cooperation. Otherwise, the global economy will pay a high price, should the correction to the imbalances be left to market forces.

ABOUT THE AUTHOR Katuri Nageswara Rao

Katuri Nageswara Rao (b. 1946) has worked in Indian Overseas Bank for 27 years followed by a brief stint of 20 months in Karur Vysya Bank as Head of the Staff Training College, Karur. During his tenure at Indian Overseas Bank, he had exposure in critical areas like credit appraisal and supervision, senior level branch management, inspection and rehabilitation of sick units. He holds an M.Sc. degree (Mathematics) from Sri Venkateswara University and is a CAIIB from the Indian Institute of Bankers, Mumbai. Presently, he is the Associate Dean, ICFAI University, Hyderabad. He is also the Consulting Editor of Professional Banker, a monthly magazine, published by the ICFAI University Press. His articles on banking and general management have been published in The Economic Times, The Hindu Business Line and The Times of India. He has already edited a few books for the ICFAI University Press on banking related topics. He has authored a book titled, "Global Banking-Asia-Pacific Region" also published by the ICFAI University Press.