External Imbalances and Financial Crises

摘要: Consider two views of the global financial crisis. One view looks across border: it blames external imbalances, unprecedented current account deficits and surpluses in recent years. Another within faults domestic systems where risks originated excessive credit booms. We can use lens macroeconomic history to confront these dueling hypotheses with evidence. The boom explanation is most plausible predictor crises since late nineteenth century; imbalances have only a weak correlation distress compared indicators drawn from system itself.