scholarly journals Negative Effect of Current Account Surplus on Long-term Growth; Focused on the Cases of Japan, S. Korea and China

2021 ◽  
Vol 9 (9) ◽  
pp. 116-147
Author(s):  
Yongshik Choe ◽  
Seong-yop You
Keyword(s):  
Growth Rate ◽  
Exchange Rate ◽  
Current Account ◽  
World Economy ◽  
Current Account Surplus ◽  
Foreign Reserve ◽  
The World ◽  
International Payment ◽  
Negative Effect

It is a teaching of current economics that the surplus of current account in international payment contributes to the increase of income. But it has got a negative effect on the long-term growth in the reality, which is easily proved by some instances. First, the Japanese growth rate has been very low despite its current account maintaining a huge surplus. Second, it is another instance that South Korea has suffered from its low growth rate even if its government has enforced the policy to defend its exchange rate from declining while its current account surplus has become large since 1998. Next, the growth rate of China has decreased from the time when its foreign reserve has begun to reduce despite its huge surplus of current account. This paper clarifies the reason why their growths are stagnant despite their huge surpluses in current account. If this paper changes the policies of above countries, it would resolve their economic difficulties and settle the imbalance of the world economy. And this paper would contribute to the evolution of economics.

scholarly journals Prospects for Vietnam’s Economy in 2013

2013 ◽  
Vol 215 ◽  
pp. 02-11
Author(s):  
NGÂN TRẦN HOÀNG
Keyword(s):  
Economic Growth ◽  
Growth Rate ◽  
World Economy ◽  
Inflation Rate ◽  
Economic Restructuring ◽  
Short Term ◽  
Economic Growth Model ◽  
The World ◽  
Global Growth

In 2012, Vietnam?s economy faced great challenges. The world economy experienced more difficulties and complicated upheavals. International trade fell drastically while global growth rate was lower than predicted target, which affected badly the Vietnamese economy because of its full integration into the world economy and large openness. In this context, principal targets set for 2013 are macroeconomic stability, lower inflation rate, higher growth rate, three strategic breakthroughs associated with restructuring of the economy, and a new economic growth model. This paper analyzes obstacles to Vietnam?s economic growth, and offers short-term solutions to bottlenecks and long-term ones to the economic restructuring.

scholarly journals Analysis of Effect of Capital Inflow Volatility and Macroeconomic Variables on Rupiah Exchange Rate

2018 ◽  
Vol 6 (1) ◽  
pp. 1-7
Author(s):  
Adnan Muhammad Feisal ◽  
Lesta Karolina Br. Sebayang
Keyword(s):  
Exchange Rate ◽  
Time Series Data ◽  
Capital Inflow ◽  
Series Data ◽  
Short Term ◽  
Macroeconomic Variable ◽  
Macroeconomic Variables ◽  
Foreign Reserve ◽  
Negative Effect

The purpose of this research is to measure the effect of the capital inflow volatility on the rupiah exchange rate, to measure the effect of macroeconomic variables on the rupiah exchange rate, and to measure the response of capital inflow shocks and macroeconomic variables on the rupiah exchange rate. The data used is in the form of quarterly time series data from 2002:4-2014:4, which is derived from the data of Bank Indonesia. The model used in this research is the Vector Error Correction Model (VECM). The results show that: (1) In the short-term capital inflow has the positive and significant effect on the rupiah exchange rate, while in the long-term it does not have the significant effect on the rupiah exchange rate. (2) Macroeconomic variable that has the positive and significant effect on the rupiah exchange rate in the short-term is the capital inflow variable. In the long-term the macroeconomic variable that has the positive and significant effect on the rupiah exchange rate is the foreign exchange reserves variable. (3) Results of IRF, the response of the rupiah exchange rate of the capital inflow shocks indicates that an increase in capital inflow has effect on the strengthening of the rupiah exchange rate. The shocks on the foreign reserve variable have the positive effect on the rupiah exchange rate, and the shocks on the inflation variable have the negative effect on the rupiah exchange rate.

Coal's Persistence in the Capitalist World-Economy

2020 ◽  
Vol 6 (2) ◽  
pp. 194-221 ◽  
Author(s):  
Paul K. Gellert ◽  
Paul S. Ciccantell
Keyword(s):  
World Economy ◽  
Industrial Revolution ◽  
Energy Transition ◽  
Ecological Modernization ◽  
World Systems ◽  
Coal Consumption ◽  
The World ◽  
Capitalist World Economy ◽  
Capitalist World

Predominant analyses of energy offer insufficient theoretical and political-economic insight into the persistence of coal and other fossil fuels. The dominant narrative of coal powering the Industrial Revolution, and Great Britain's world dominance in the nineteenth century giving way to a U.S.- and oil-dominated twentieth century, is marred by teleological assumptions. The key assumption that a complete energy “transition” will occur leads some to conceive of a renewable-energy-dominated twenty-first century led by China. After critiquing the teleological assumptions of modernization, ecological modernization, energetics, and even world-systems analysis of energy “transition,” this paper offers a world-systems perspective on the “raw” materialism of coal. Examining the material characteristics of coal and the unequal structure of the world-economy, the paper uses long-term data from governmental and private sources to reveal the lack of transition as new sources of energy are added. The increases in coal consumption in China and India as they have ascended in the capitalist world-economy have more than offset the leveling-off and decline in some core nations. A true global peak and decline (let alone full substitution) in energy generally and coal specifically has never happened. The future need not repeat the past, but technical, policy, and movement approaches will not get far without addressing the structural imperatives of capitalist growth and the uneven power structures and processes of long-term change of the world-system.

Foreign Exchange Policies of PRC: Historical Aspect

2014 ◽  
pp. 24-31
Author(s):  
A. Binder ◽  
A. Kononov
Keyword(s):  
Exchange Rate ◽  
Foreign Exchange ◽  
Perspective Taking ◽  
Historical Perspective ◽  
Chinese Economy ◽  
Historical Aspect ◽  
Distinctive Features ◽  
The World ◽  
Exchange Policy

The article analyzes the distinctive features of the PRC foreign exchange policy from the historical perspective, taking the national color into account and emphasizing the traditions-modernity unity in its strategy. It reviews the debates over renminbi exchange rate, disclosing the weakness of the modern international foreign exchange law. It systemizes the practices of international pressures applied to China in this aspect. It is stated, that China’s foreign exchange reforming process is of a long-term nature, and it will be completed only by the time the Chinese economy gets adjusted to the world market’s requirements.

What Explains Current Account Surplus in Korea?

2018 ◽  
Vol 17 (2) ◽  
pp. 70-93
Author(s):  
Chirok Han ◽  
Kwanho Shin
Keyword(s):  
Exchange Rate ◽  
Fiscal Policy ◽  
Current Account ◽  
Current Account Balance ◽  
Budget Deficits ◽  
Current Account Surplus ◽  
Short Run ◽  
The Right ◽  
The Impact ◽  
The Current Account

Since the currency crisis in 1998, Korea has experienced continuous current account surpluses. Recently, the current account surplus increased more rapidly—amounting to 7.7 percent of GDP in 2015. In this paper, we investigate the underlying reasons for the widening of Korea's current account surpluses. We find that the upward trend in Korea's current account surpluses is largely explained by its demographical changes. Other economic variables are only helpful when explaining short run fluctuations in current account balances. Moreover, we show that Korea's current account surplus is expected to disappear by 2042 as it becomes one of the most aged economies in the world. Demographic changes are so powerful that they explain, quite successfully, the current account balance trends of other economies with highly aged populations such as Japan, Germany, Italy, Finland, and Greece. When we add the real exchange rate as an additional explanatory variable, it is statistically significant with the right sign, but the magnitude explained by it is quite limited. For example, to reduce the current account surplus by 1 percentage point, a 12 percent depreciation is needed. If Korea's current exchange rate is undervalued 4 to 12 percent less than the level consistent with fundamentals, it is impossible to reduce Korea's current account surplus to a reasonable level by adjusting the exchange rate alone. Another way to reduce current account surplus is to expand fiscal policies. We find, however, that the impact of fiscal adjustments in reducing current account surplus is even more limited. According to our estimates, reducing the current account surplus by 1 percentage point requires an increase in budget deficits (as a ratio to GDP) of 5 to 6 percentage points. If we allow endogenous movements of exchange rate and fiscal policy, the impact of exchange rate adjustment increases by 1.6 times but that of fiscal policy decreases that it is no longer statistically significant.

scholarly journals Structural changes and economic growth in the world economy and Russia

2019 ◽  
Vol 5 (1) ◽  
pp. 1-26 ◽  
Author(s):  
Valeriy V. Mironov ◽  
Liudmila D. Konovalova
Keyword(s):  
Economic Growth ◽  
Growth Rate ◽  
Global Economy ◽  
World Economy ◽  
Structural Changes ◽  
Russian Economy ◽  
The World ◽  
Preliminary Version ◽  
The One ◽  
Relationship Of

The article considers the problem of the relationship of structural changes and economic growth in the global economy and Russia in the framework of different methodological approaches. At the same time, the paper provides the analysis of complementarity of economic policy types, which, on the one hand, are aimed at developing the fundamentals of GDP growth (institutions, human capital and macroeconomic stabilization), and on the other hand, at initiating growth (with stable fundamentals) with the help of structural policy measures. In the study of structural changes in the global economy, new forms of policies of this kind have been revealed, in particular aimed at identifying sectors — drivers of economic growth based on a portfolio approach. In a given paper a preliminary version of the model of the Russian economy is provided, using a multisector version of the Thirlwall’s Law. Besides, the authors highlight a number of target parameters of indicators of competitiveness of the sectors of the Russian economy that allow us to expect its growth rate to accelerate above the exogenously given growth rate of the world economy.

scholarly journals The new structural economics: patient capital as a comparative advantage

2017 ◽  
Vol 1 (1) ◽  
pp. 4 ◽  
Author(s):  
Justin Yifu Lin ◽  
Yan Wang
Keyword(s):  
Comparative Advantage ◽  
World Economy ◽  
Institutional Factors ◽  
Capital Account ◽  
Public Infrastructure ◽  
Short Term ◽  
Capital Account Liberalization ◽  
The World ◽  
New Structural Economics

The world economy needs a growth-lifting strategy, and infrastructure financing seems to hold the key. Based on the New Structural Economics (Lin, 2010; 2012) we discuss the heterogeneity of capital focusing on the long-term versus short-term orientation (STO). Traditional neoliberalism assumes that capital is homogenous, complete capital account liberalization is “beneficial”.However, previous studies have found evidence of long-term orientation (LTO) in the culture of many Asian economies (Hofstede, 1991). In this exploratory paper, we suggest that the LTO can be considered a special endowment which, under certain circumstances, can be developed into a comparative advantage (CA) in patient capital. If these countries can turn their latent CA into arevealed CA in patient capital, and develop the ability to “package” profitable and non-profitable projects in meaningful ways, they would have a “revealed” competitive advantage in infrastructure financing. The ability to “package” public infrastructure and private services is one of the key institutional factors for success in overseas cooperation.

scholarly journals International Trade in Goods and Services: Aspects of Monetary and Financial Relations

2020 ◽  
Vol 19 (4) ◽  
pp. 40-49
Author(s):  
E.V. Potekhina ◽  
◽  
A.D. Efremova ◽  
Keyword(s):  
International Trade ◽  
Exchange Rate ◽  
World Economy ◽  
International Division ◽  
Goods And Services ◽  
Number Of Factors ◽  
The World ◽  
The Russian Federation ◽  
National Economies

the article examines such topical problems of the world economy as the peculiarities of interaction between the subjects of the world economy, international trade, international monetary and financial relations, the role of the exchange rate for national economies. The issues of the national economy of the Russian Federation and the degree of the country’s participation in the international division of labor and its openness are considered. In this paper, using the example of Russia, the export of goods and services is analyzed, its relationship with a number of factors (exchange rate and oil price), where the main tools are methods of statistical and econometric analysis.

DEVELOPMENT OF THE RUSSIAN SEGMENT OF THE ARCTIC ZONE AS A REGIONAL MEASUREMENT OF WORLD GEOPOLITICS

2020 ◽  
pp. 73-77
Author(s):  
T.S. Sukhodaeva ◽  
Keyword(s):  
World Economy ◽  
The Arctic ◽  
Russian Arctic ◽  
Competitive Advantages ◽  
Arctic Zone ◽  
Arctic Council ◽  
The World ◽  
Arctic Policy

The article discusses the features of the Arctic zone, its place in the world economy and international relations. The reasons for the intersection of the geopolitical interests of the leading states of the world in this region are revealed. The main directions of scientific and technical cooperation in the development of the Arctic are identified. The role of the Arctic Council in solving the problem of coordinating the interests of various actors in the region is shown. The strategic necessity of the development of the Arctic as a region free of conflicts and rivalry is substantiated. The analysis of the Russian Arctic policy and mechanisms for its implementation. The author substantiates the conclusion that the development of the Russian Arctic zone can become a driving force for the qualitative growth of the national economy, the formation of the country's competitive advantages in the long term, as well as maintaining the global ecological balance and stability.

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