Discussion Paper

Globalization and imbalances in historical perspective

Abstract: Global imbalances associated with the U.S. current account deficit have given rise to speculation about the nature of the impending adjustment: Will it be smooth and gradual, or will it be sudden and costly? This paper summarizes the two views and then considers three historical periods with similar pressures--an earlier era of globalization from 1870 to 1914, the interwar gold standard, and Bretton Woods. A comparison of the periods and their outcomes suggests current global imbalances might resolve themselves quietly.

Bibliographic Information

Provider: Federal Reserve Bank of Cleveland

Part of Series: Policy Discussion Papers

Publication Date: 2006

Issue: Jan

Order Number: 13