Global Imbalances and Foreign Asset Expansion by Developing-Economy Central Banks
18 Pages Posted: 4 Jan 2013 Last revised: 5 Oct 2013
Date Written: October 1, 2012
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: Suggested Citation