Global Imbalances and Foreign Asset Expansion by Developing-Economy Central Banks

18 Pages Posted: 4 Jan 2013 Last revised: 5 Oct 2013

Multiple version iconThere are 2 versions of this paper

Date Written: October 1, 2012

Abstract

In the aftermath of the Asian financial crisis of 1997–99, central banks and governments throughout the developing world have accumulated foreign exchange reserves and other official assets at an unprecedented rate. This paper shows that this official asset accumulation has driven a substantial portion of the recent large global current account imbalances. These net official capital flows have become large relative to the size of the industrial economies, and they are a significant factor contributing to the weakness of the economic recovery in the major industrial economies.

Full publication: Are Central Bank Balance Sheets in Asia Too Large?

Keywords: current account, foreign exchange reserves

JEL Classification: F31, F32

Suggested Citation

Gagnon, Joseph, Global Imbalances and Foreign Asset Expansion by Developing-Economy Central Banks (October 1, 2012). BIS Paper No. 66j, Available at SSRN: https://ssrn.com/abstract=2185370

Joseph Gagnon (Contact Author)

Peterson Institute ( email )

1750 Massachusetts Avenue, NW
Washington, DC 20036
United States

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