With high growth rates in Asia, most notably in China, India, and Southeast and Central Asia, Eurasia's economic center of gravity is rapidly shifting to the East. At the same time, most of Europe faces serious barriers to growth in the long term. The volume examines the causes and consequences of this major shift in economic power and considers the options available to policymakers in various parts of Europe and Asia. The ten chapters in this book focus on long-term challenges of globalization rather than short-term problems of individual countries and explore two themes: global macroeconomic imbalances and growth. This work is based on a CASE-Center for Social and Economic Research and CASE-Ukraine conference.
- Cover
- Table of Contents
- Preface
- Acknowledgments
- Introduction: Challenges of Globalization
- A Golden Period of Global Growth
- How Severe and Dangerous Are Global Imbalances?
- Capitalism: A Model of Economic Growth
- Chapter 1 Are Large External Imbalances in Central Europe Sustainable?
- Large Imbalances and Income Catch-Up: Stylized Facts
- How Do the Influences on Growth Stack Up to Emerging Markets More Generally?
- How Do Markets View the Risks?
- Are Growth and Current Account Positions in Sync?
- Conclusion
- Chapter 2 Current Account Imbalances in the Euro Area
- Stylized Facts
- Net Financial Flows and the EMU
- Conclusion
- Chapter 3 Rethinking Balance of Payments Constraints in a Globalized World
- Historical Background: From a Closed Economy to the Globalized World
- BoP and IIP Concepts and Their Limitations
- Looking for Greater Flexibility in Analyzing BoP Constraints
- Challenging “Home Country Bias”
- Alternative Analytical Framework
- Policy Implications of the Alternative Analytical Framework
- Final Remarks and Conclusions
- Chapter 4 A World Out of Balance?
- The US External Position: Evolution and Determinants
- Changes in Global Financial Markets and the US Current Account Deficit
- Oil Prices and the Sudden Emergence of an Important Source of Excess Savings
- Model-Based Analysis of the Intersection of Global Growth, Interest Rates, and Oil Prices
- Concluding Remarks
- Chapter 5 Sustainable Adjustment of Global Imbalances
- The Exchange Rate and Monetary Policy in a Forward-Looking Model
- Orderly Adjustment Through Risk Premia
- A Mixed Scenario of US Devaluation and Demand Change Elsewhere
- Conclusion
- Chapter 6 Meeting the China Challenge Is Meeting the Challenge of Comprehensive Engagement and Multilateralism
- Rising Protectionist Sentiments Against Trade with China
- Nature of the Link Between Globalization and Worker Anxiety in the United States
- Understanding the Evolution of China’s Current Account Balance
- Misplaced High Hopes on the Curative Power of Renminbi Appreciation
- A Multilateral Policy Package to Address Trade Tensions with China
- Final Remarks
- Chapter 7 Institutional Systems and Economic Growth
- Innovation-Based Growth
- Determinants of Individual Choice
- Linking Individual Choice to Institutional Systems
- The Information Barrier to Innovation-Based Growth
- The Incentive Barrier: Institutional Systems that Block Innovation-Based Growth
- A Look at History: Growth Accelerations and Slowdowns
- Successful Reform Packages: Direction, Scope, and Time Structure
- Institutions, Macroeconomic Shocks, Long-Run Growth
- Concluding Comments
- Chapter 8 Impact of “Legal School” Versus Recent Colonial Origin on Economic Growth
- Investigative Approach
- Legal School as a Determinant of Economic Performance
- Colonial Heritage
- Institutions Versus Malaria?
- Conclusions
- Chapter 9 Does the European Union Emulate the Positive Features of the East Asian Model?
- Characteristics of the East Asian Model in Comparison with the EU Model
- Controversy over the East Asian Model
- Adaptation and Reform of the European Union
- Conclusions: Competition Revives Subsidiarity
- Chapter 10 Eight Potential Road blocks to Smooth EU-China Economic Relations
- Europe Is at Risk of Being Squeezed Between the United States and China
- Dysfunctional European Labor Markets Add to Adjustment Cost
- Chinese Integration into the World Economy May Interfere with European Integration
- Chinese Competition Is Destabilizing Europe’s Privileged Trade Relations
- China’s Strong Demand for Energy and Raw Materials Affects Import-Dependent European Union
- Europe’s and China’s Stances on Climate Change May Result in Conflict over Emissions Containment and Its Trade Implications
- Euro Exchange Rate Risks Being the Ultimate Adjustment Variable
- China’s Rise to World Economic Power Status Is Bound to Reduce Europe’s Weight in International Organizations
- Conclusion
- About the Contributors
- Index
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