What are serious economic imbalances. how toa tackle problems from such imbalances?
biatricem@yahoo.co.uk
Answer:
mostly the imbalances refer to trade and credit.
THe USA have a trade deficit in goods and services with the rest of the world, they buy more than they sell.
More investors of the USA invest abroad than do foreign investors invest in the USA.
SO the USA are in balance only by borrowing more from abroad, and foreign central banks are the main lenders of the USA.
Symetrically China, Japan, south east asia run a commercial excedant and so do oil exporting countries.
EUrope is quite neutral (germany exports, italy imports)
sooner or later the USA will have to repay their debt. THis may hurt the countries that are used to sell them more and more products, especiall if the USA start repaying with a currency that has lost much of its value.
WHen they start repaying debt the USA may realise that there s very little demand within their country.
SO the aim should be a slow adjustment and yet no one dares start it.
This is a short but tough question to ask. In short, it differs from country to country and one should also take into consideration the fact whether we are discussing a under-developed, developing or developed country. The demographics of the population in terms of education & cultural background plays a important part in the discussion. There are no one best soultion to the above question, solutions are derive from thorough understanding of the situation, formulating a clear and precise vision of where the future lies and building a roadmap on leading the population to that future.
There are just too many factors to consider, a policy maker really have to plough through heaps of statistic & data, besides that he/she must have a feel of the ground on what are the population wants & wishes.
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Answer:
mostly the imbalances refer to trade and credit.
THe USA have a trade deficit in goods and services with the rest of the world, they buy more than they sell.
More investors of the USA invest abroad than do foreign investors invest in the USA.
SO the USA are in balance only by borrowing more from abroad, and foreign central banks are the main lenders of the USA.
Symetrically China, Japan, south east asia run a commercial excedant and so do oil exporting countries.
EUrope is quite neutral (germany exports, italy imports)
sooner or later the USA will have to repay their debt. THis may hurt the countries that are used to sell them more and more products, especiall if the USA start repaying with a currency that has lost much of its value.
WHen they start repaying debt the USA may realise that there s very little demand within their country.
SO the aim should be a slow adjustment and yet no one dares start it.
This is a short but tough question to ask. In short, it differs from country to country and one should also take into consideration the fact whether we are discussing a under-developed, developing or developed country. The demographics of the population in terms of education & cultural background plays a important part in the discussion. There are no one best soultion to the above question, solutions are derive from thorough understanding of the situation, formulating a clear and precise vision of where the future lies and building a roadmap on leading the population to that future.
There are just too many factors to consider, a policy maker really have to plough through heaps of statistic & data, besides that he/she must have a feel of the ground on what are the population wants & wishes.
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