from International Institutions and Global Governance Program and Greenberg Center for Geoeconomic Studies

Global Imbalances, National Rebalancing, and the Political Economy of Recovery

October 20, 2009

Download PDF
Report

More on:

Economic Crises

Financial Markets

Overview

Global macroeconomic imbalances—massive borrowing by some countries and massive lending by others—drove the financial boom and bubble that eventually burst into the current crisis. These imbalances are now shrinking, creating a new risk—this time, a political one. Nations that have relied on foreign borrowing to fuel government and household spending will have to cut back drastically; nations that have relied on exports as the engine of economic growth will have to rely less on foreign markets; in both cases, powerful interests will be threatened. In this Center for Geoeconomic Studies Working Paper, produced in association with the CFR's International Institutions and Global Governance program, Jeffry A. Frieden reviews the historical record on the political fallout from the unraveling of macroeconomic imbalances. He warns that the coming adjustments may test the capacity of national governments and international institutions to maintain an open international economic order.

More on:

Economic Crises

Financial Markets

Explore More on Economic Crises

Monetary Policy

What Is the U.S. Federal Reserve?
Over the past decade, the Fed kept interest rates low while it deployed trillions of dollars in stimulus and expanded its regulatory oversight. Now, the central bank is back in the spotlight for its battle against inflation. 

Backgrounder by James McBride, Anshu Siripurapu and Noah Berman November 8, 2022 Renewing America

Puerto Rico

Puerto Rico: A U.S. Territory in Crisis
The Caribbean island, which shares a close yet fraught relationship with the rest of the United States, faces a multilayered economic and social crisis rooted in long-standing policy and compounded by natural disasters, the COVID-19 pandemic, migration, and government mismanagement.

Backgrounder by Amelia Cheatham and Diana Roy September 29, 2022

Economics

Revisiting the Ides of March, Part III: Scary Stories to Tell in the Dark

Blog Post by Guest Blogger for Brad Setser July 23, 2020 Follow the Money

Top Stories on CFR

United States

Biden at the UN: Inclusive Internationalism
Amid renewed calls for changes in the world order, U.S. President Joe Biden sought to stress his support for greater inclusion of developing nations in addressing economic, social, and climate concerns.

In Brief by Esther Brimmer September 19, 2023

Climate Change

The Weather of Summer 2023 Was the Most Extreme Yet

Photo Essay by Noah Berman and Sabine Baumgartner September 18, 2023

United States

U.S. Investment in Semiconductor Manufacturing: Building the Talent Pipeline

To reverse the three decade long decline in the United States' share of semiconductor manufacturing, a concerted effort is required.

Blog Post by Sherry Van Sloun September 18, 2023 Renewing America