Recession and rebalancing: How the housing and credit crises will impact US real activity
This paper assesses how the current housing and credit crisis will impact US real activity, and how recession interacts with adjustment of global imbalances. A simple real-side model with decreasing returns to factors and non-clearing goods and labor markets is disaggregated into traded and non-traded sectors and three regions (US, EU and Asia). A three region model offers two degrees of freedom and six candidate variables for endogeneity in international accounts. Applying standard income and elasticities approaches as well as a less standard "Bretton Woods II" closure in simulations suggests external imbalances can be reduced in the current recession with a mix of fiscal expansion and some Asian real appreciation.
Year of publication: |
2009
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Authors: | von Arnim, Rudiger |
Published in: |
Journal of Policy Modeling. - Elsevier, ISSN 0161-8938. - Vol. 31.2009, 3, p. 309-324
|
Publisher: |
Elsevier |
Keywords: | Global imbalances Bretton Woods II CGE-model |
Saved in:
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