Back Matter

Back Matter

Author(s):
Hamid Faruqee, and Krishna Srinivasan
Published Date:
August 2013
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Index

[Page numbers followed by b, f, n, or t refer to boxed text, figures, footnotes, or tables, respectively.]

A

Advanced economies

  • need for medium-term consolidation in, 150

  • policy implications from case studies for, 149, 150

  • significance of current account imbalances in, 7–8

  • structural reform needs of, 150–151

B

Basel III requirements, 52, 69, 117

Borrowing, private

  • constraints to, in China, 101

  • disincentives and constraints to, in India, 81–82, 85, 86

  • imbalances in the United Kingdom and, 42, 47

  • imbalances in the United States and, 24, 25

  • patterns in the United Kingdom, 43, 43f, 44–45, 47, 50

C

China, external surpluses in

  • causes of, 93, 96f, 97–101, 148–149

  • credit access and, 101

  • development of, 93–96, 94f

  • domestic consumption and, 95, 97b, 106

  • exchange rate policy and, 102, 102f, 103f, 106

  • factor market distortions and, 99, 107

  • financial sector reform for addressing, 154–155

  • foreign exchange reserves and, 102–103, 103f

  • future prospects for, 96–97

  • interest rate policy and, 100, 101, 104, 104f

  • investment patterns and, 95–96, 99f, 100

  • labor market and, 94, 94n, 99, 101, 107

  • manufacturing sector growth and, 98

  • policy response to, 102–105

  • poverty rate and, 96

  • private saving and, 93–95, 94f, 98–101, 99f, 105f

  • public saving and, 93, 94f, 104, 148–149

  • rationale for rebalancing, 105

  • reform of state-owned enterprises and, 97–98, 99–100, 101

  • social welfare programs and, 101, 106

  • sterilization of foreign exchange and, 102–104

  • strategies for rebalancing, 93, 97b, 106–107, 150, 151, 154–155, 154b

  • sustainability assessment, 5–6b

Collective action, 150–158

policy action to achieve G20 growth objectives, 150–151

Consumption

  • in China, 95, 97b, 106

  • in India, 84, 84f

  • recommendations for Japanese tax on, 142

  • in the United Kingdom, 39, 42, 43f, 46

  • in the United States, 21, 24, 29

Cross-border spillovers

  • benefits of rebalancing in China, 107

  • benefits of rebalancing in Germany, 123

  • global implications of U.K. imbalances, 50–51, 54

  • global significance of U.S. economy, 32–33, 36

  • from imbalances in France, 67, 68

  • from individual current account deficits, 11

  • from individual current account surpluses, 12–14

  • macroeconomic model of, 16–18

  • risk from Japan, 140, 142

  • risk surveillance, 11, 14–15

  • threats from export-led growth strategy, 12

Current account balances

  • assessment methodology, 8

  • beneficial imbalances, 7

  • case studies, 8, 147, 148f. See also specific country

  • detrimental imbalances, 7

  • future challenges for G20, 158–159

  • global significance of, 7–8

  • multilateral surveillance rationale, 14–15

  • policy implications from case studies, 149–158

  • saving imbalances as cause of, 147, 148f

  • simulated gains from upside scenario, 155–158, 156f, 157f, 158f

  • as source of global financial crisis, 3, 7n

  • strategy for sustainable recovery, 3, 6, 21

  • sustainability assessments, 4–6

  • systemic risk, 6–7

  • trends, 4, 4f

  • See also Deficits, current account; Internal imbalances; Surpluses, current account

D

Defense spending, U.S. deficits and, 22, 23b, 26

Deficits, current account

  • causes of, in case study countries, 147–148

  • causes of, in France, 57, 62–67, 148

  • causes of, in Japan, 125, 126

  • causes of, in the United Kingdom, 39–41

  • causes of, in the United States, 21, 23b, 24, 28–31, 148

  • development in France, 57, 58–59

  • development in the United States, 21, 22–25, 22f

  • in Germany, 109

  • multilateral implications, 11

  • policy implications from case studies, 149, 159

  • positive and negative sources, 9–10

  • projections for the United Kingdom, 39–40

  • saving imbalances as cause of, 147

  • significance of France’s, 67

  • strategies for addressing imbalances in the United States, 33–36

Demographic patterns and trends

  • employment ratios, 71f

  • entitlement spending in the United States and, 27

  • implications for current account policymaking, 7

  • in India, 85

  • in Japan, 126, 130–131

  • private saving in Germany and, 117

Dot-com bubble, 23b

E

Economic growth

  • in China, 93–97, 96f

  • in Germany, 109–112, 118–119

  • global significance of U.S. performance, 32–33

  • in India, 73, 74f, 85–86

  • in Japan, 125, 128–132, 129f, 130f

  • strategies for sustainable recovery, 3

  • in the United Kingdom before financial crisis, 39–40, 40f

  • U.S. policies to restore, 21

Emerging market economies

  • French export competitiveness and, 64

  • future growth in, 158–159

  • German export competitiveness and, 120

  • government revenues in, 80, 80f

  • policy implications from case studies for, 149

  • saving imbalances in, 148, 149, 151, 162–163

  • significance of current account imbalances in, 7–8

  • social indicators in, 78t

  • U.S. imbalances and dollar pegs in, 30–31

Entitlement spending

  • in Japan, 133

  • strategies for improving U.S. economy, 34, 35

  • trends in the United States, 27–28, 34, 35

  • upside scenario policy reforms for G20 countries, 152

  • See also Health care spending; Pension programs; Social assistance programs; Social security spending

Euro area

  • employment patterns in, 71f

  • France’s entry into, 58–59

  • France’s export market share, 63, 64

  • significance of France’s imbalances for, 67

  • significance of German economy for, 119

  • significance of imbalances in, 8

Exchange rate

  • China’s, 97, 102, 102f, 103f, 106, 154b

  • France’s, 65f, 69–70

  • Germany’s, 113–114

  • model of cross-border effects of, 16–18

  • undervalued, 12

  • U.S. external imbalances and, 30, 31

Export-led growth

  • definition, 10

  • multilateral risk, 12

  • as source of surpluses, 10

F

Financial sector

  • benefits of rebalancing for China’s reform of, 105

  • causes of financial crisis, 29–30

  • causes of imbalances in the United Kingdom, 39, 42, 50

  • future prospects in the United Kingdom, 46

  • growth in the United Kingdom, 48–49

  • liquidity requirements in India, 81, 89

  • liquidity requirements in the United Kingdom, 52–53

  • recommendations for reform of China’s, 106

  • recommendations for reform of Germany’s, 120, 121

  • strategies for addressing India’s imbalances, 89

  • strategies for addressing U.K. imbalances, 52–54

  • strategies for improving U.S. economy, 34–35

  • upside scenario policy reforms for G20 countries, 152–153

  • See also Regulation, financial

Fiscal imbalances. See Internal imbalances

Fiscal stimulus

  • China’s response to financial crisis, 96f

  • Japan’s spending, 131–132

  • outcomes in France, 61

  • outcomes in Germany, 118

  • outcomes in the United Kingdom, 45

  • U.S. response to financial crisis, 27

France

  • causes of imbalances in, 57, 60–67, 148

  • composition of current account balances in, 58f

  • development of imbalances in, 57–59

  • entitlement and social welfare spending in, 59–61, 69

  • exchange rate patterns, 65f

  • export competitiveness, 62–64, 69–71

  • financial crisis outcomes in, 59

  • labor market, 63–64, 65–67, 66f, 70, 154b

  • Organic Law, 69

  • private saving–investment balance, 57, 58f, 59f

  • productivity issues, 63, 64f, 69–70, 72, 154b

  • projected balances, 59–60

  • public debt in, 57, 59, 60f, 61, 62f, 67

  • public saving–investment balance, 57, 59f

  • regulatory reforms, 69–70

  • significance of imbalances in, 67

  • strategies for addressing imbalances in, 57, 59–60, 68–72, 149

  • sustainability assessment, 5–6b

  • tax reforms, 70–71, 71

G

Germany

  • causes of external surpluses in, 109, 112–117, 149

  • current account projections for, 112

  • effects of reunification, 109, 110–111, 118

  • exchange rate, 113–114, 115

  • financial crisis outcomes in, 112, 118

  • financial sector, 120

  • fiscal imbalances in, 118

  • impediments to saving in, 116–117

  • labor market, 111, 112–113, 120, 123

  • manufacturing exports, 113, 113f

  • population aging in, 117

  • private domestic investment in, 109, 111–112, 111f, 115–116, 118–119, 119f

  • private saving in, 109, 112, 115, 116–117

  • productivity issues in, 116, 118, 119, 120, 121, 154b

  • public debt in, 109, 112, 118, 119, 122

  • public saving in, 116

  • rationale for addressing imbalances in, 118–119

  • recent economic performance, 109–112, 110f

  • strategies for addressing imbalances in, 109, 119–123, 150

  • sustainability assessment, 5–6b

  • tax policy, 111, 120, 122, 123, 123n

  • venture capital market, 115, 116f, 120

  • wages, 109, 110, 111, 112–114, 114f, 118, 120

  • women in workforce, 120, 152, 154b

  • work rule reforms, 110–111

Global financial crisis

  • causes of, 7n, 13–14, 25, 29–30, 29n

  • Group of Twenty response, 3

  • outcomes in France, 59

  • outcomes in Germany, 112, 118

  • outcomes in Japan, 127

  • outcomes in the United States, 25, 27

  • precrisis analysis of imbalances, 11

  • recovery status, 4

  • significance of current account balances in recovery from, 3, 7–8

Group of Twenty, 3

  • assessment of key imbalances in, 4–6

  • collective action to achieve growth objectives of, 150–158

  • future policymaking challenges, 159

  • Mutual Assessment Process, 3, 4–6, 159

  • national saving and investment patterns, 42f

  • public debt, 126f

  • revenue collection, 80, 80f

  • structural reform needs, 152, 153–154b

  • tax and entitlement reform recommendations, 152

  • See also specific country

H

Health care spending

  • fiscal imbalances in the United States and, 23b, 27

  • in France, 69

  • in India, 89

  • life expectancy in the United States and, 27f

  • recommendations for China, 106

  • strategies for improving U.S. economy, 34

  • in the United Kingdom, 41

Housing bubble

  • U.K., 39, 43–45, 47–48, 148

  • U.S., 7n, 24, 25, 28, 29, 30

I

Incomes, household

  • in China, 93–94, 95f, 105

  • French household saving and, 76

  • in India, 84, 84f

  • in Japan, 133, 134

  • in U.K., 42, 43f, 44, 46

  • U.S. household saving and, 36

India

  • balance of payments crisis (1991), 73

  • bond market, 89

  • causes of imbalances in, 73, 77–85, 148

  • credit access in, 85, 86

  • demographic trends in, 85

  • financial controls in, 81–84, 89, 90

  • Fiscal Responsibility and Budget Management Act, 74–75

  • future challenges for, 77

  • government securities, 81, 83, 83t, 84n

  • health care spending, 89

  • infrastructure investment, 86

  • labor market, 154b

  • macroeconomic stability, 87

  • private saving and investment in, 73, 75–77, 76f, 82f, 83f, 84–85

  • public debt, 73, 73f, 74–75, 77, 86–87

  • public saving and investment in, 75, 76f

  • public spending in, 78–79, 88–89

  • recent economic performance, 73–77, 74f

  • revenue collection, 78, 79–81, 87–88, 90

  • significance of fiscal imbalances in, 85–87

  • size of deficits, 73

  • social indicators, 78, 78t, 79

  • strategies for addressing imbalances in, 87–90

  • subsidy programs, 88

  • sustainability assessment, 5–6b

Indicative guidelines for sustainability assessments, 4–6, 5–6b, 5f

Interest rates

  • in China, 100, 101, 104, 104f

  • future prospects for the United States, 31, 33

  • global financial crisis and, 29n

  • global spillovers of rebalancing in China, 107

  • India’s, 81–82, 83–84

  • model of cross-border effects, 16–18

  • saving behavior and, 47

  • as source of global imbalances, 13–14

  • in the United Kingdom, 47, 50

  • in the United States, 24, 25, 29, 31, 33

Internal imbalances

  • causes of, in France, 60–61

  • causes of, in India, 73, 77–85

  • causes of, in the United States, 22, 23, 23b, 26–28

  • development in India, 73, 74–75

  • development in the United States, 21, 22f, 25

  • future challenges for the United States, 27–28

  • future prospects for France, 59–60

  • in Germany, 118

  • outcomes of global financial crisis in the United States, 27

  • patterns in France, 58–59

  • significance of France’s, 67

  • significance of India’s, 85–87

  • strategy for sustainable recovery, 3, 6, 21

  • trends, 4

International Monetary Fund

  • assessment of key imbalances in G20 countries, 4–6

  • exchange rate policy obligations, 12n

Investment, private

  • as cause of imbalances in case studies, 148, 149

  • in China, 95–96, 96–97, 100

  • in France, 57, 58f, 59f

  • in Germany, 109, 111–112, 111f, 115–116, 118–119, 119f

  • impediments to, 115–117, 129

  • in India, 75–76, 86

  • in Japan, 127, 129, 131

  • in the United Kingdom, 40f, 41, 42, 42f, 46

  • in the United States, 24

Investment, public

  • in France, 59f

  • in India, 75

  • in Japan, 127–128

J

Japan

  • causes of fiscal deficits, 125, 126, 128–138, 147, 148

  • demographic trends, 126, 130–131

  • distribution of government spending, 134f, 141–142

  • earthquake (2011), 127

  • external surpluses, 127, 149

  • financial crisis outcomes, 127

  • Fiscal Management Strategy, 141

  • government bond market, 137–138, 138f, 139, 140

  • household income, 133, 134

  • investment patterns in, 127, 129, 131

  • labor market, 130–131, 130f, 136, 141, 154b

  • monetary policy, 131–132

  • nonfinancial corporate saving, 136–137, 136f

  • pension program, 142

  • private saving, 125, 128, 134–137, 135f

  • productivity trends, 129, 154b

  • projected imbalances, 128, 132

  • public debt, 125, 132f, 139–140, 139f

  • rationale for addressing imbalances in, 125, 138–140

  • recent economic performance, 125, 126f, 130f

  • relationship between household and corporate saving, 135b

  • risk of global spillover effects of imbalances in, 140, 142

  • services sector, 129, 131, 141

  • small- and medium-sized firms, 131, 141

  • social welfare and entitlement spending, 133, 134f, 142

  • state-owned financial institutions, 138

  • strategies for addressing imbalances in, 125, 140–142, 149, 150

  • sustainability assessment, 5–6b

  • tax policy and collection, 132–133, 133t, 136–137, 141–142

  • wages, 136

  • women in workforce, 141, 152, 154b

L

Labor markets

  • China’s, 94, 94n, 99, 101, 107

  • France’s export competitiveness and, 63–64, 65–67, 70, 154b

  • German, 109, 110, 111, 112–114, 114f, 120, 123

  • India’s, 154b

  • international comparison of demographic patterns, 71f

    Japan’s, 130–131, 130f, 136, 141, 154b

  • recommended reforms for France, 70, 72

  • strategies for improving U.S. economy, 34

  • tax percentage of labor costs, 121f

  • U.K., 154b

  • upside scenario policy reforms for G20 countries, 152, 153–154b

  • U.S., 34, 154b

  • women’s participation in, 71t, 120, 141, 152, 154b

  • See also Productivity

Liquidity trap, 7, 13, 14, 15, 16–18, 107

M

Monetary policy

  • sources of Japan’s slow growth, 131–132

  • strategies for addressing U.K. imbalances, 51–52

  • U.S., global financial crisis and, 29n

Mutual Assessment Process, 159

  • indicative guidelines, 4–6, 5–6b, 5f

  • objectives, 3

  • origins, 3

O

Oil market, U.S. external imbalances and, 31

Originate-to-distribute lending, 29

P

Pension programs

  • in China, 101

  • in France, 59–60, 69

  • in Japan, 142

  • in the United Kingdom, 51

  • upside scenario policy reforms for G20 countries, 152

  • in the United States, 27–28

Pittsburgh Summit, 3

Policymaking

  • beneficial current account imbalances, 7

  • China’s response to rising saving, 102–105

  • detrimental current account imbalances, 7

  • export-led growth, 12

  • future challenges for G20 countries, 159

  • future challenges for the United States, 31–33

  • lessons from case studies, 149–158, 159

  • multilateral surveillance rationale, 14–15

  • shortcomings of U.S. fiscal rules, 28

  • sources of China’s economic growth, 97–98, 99–100

  • sources of U.S. twin deficit, 22–25

  • strategies for addressing China’s imbalances, 93, 97b, 106–107

  • strategies for addressing France’s imbalances, 59–60

  • strategies for addressing Germany’s imbalances, 109, 119–123

  • strategies for addressing India’s imbalances, 87–90

  • strategies for addressing Japan’s imbalances, 140–142

  • strategies for addressing U.K. imbalances, 51–54

  • strategies for improving U.S. economy, 33–36

  • U.K. response to financial crisis, 45–46

  • upside scenario, 150, 151–155

Political functioning

  • obstacles to fiscal rebalancing in the United States, 28

  • public spending in India and, 77, 78–79

Poverty in China, 96

Privatization, of China’s housing stock, 101

Productivity

  • in China, 103f, 154b

  • in France, 63, 64f, 69–70, 72, 154b

  • in Germany, 116, 118, 119, 120, 121, 154b

  • in India, 154b

  • in Japan, 129, 141, 154b

  • in the United Kingdom, 42

  • upside scenario policy reforms for G20 countries, 152, 154b

Product markets

  • regulation in OECD countries, 66f

  • rigidities in France, 65–67, 70, 72

  • upside scenario of policy reforms, 152, 153–154b

Public debt

  • in France, 57, 59, 60f, 61, 62f, 67, 68–69

  • in Germany, 109, 112, 118, 119, 122

  • in India, 73, 73f, 74–75, 77, 78–84, 86–87

  • in Japan, 125, 132f, 139–140, 139f

  • U.K. strategies to reduce, 48

  • in the United Kingdom, 45–46, 45f, 48–49

  • in the United States, 27, 28, 31, 32f, 33

R

Regulation, business

  • corporate saving in Germany and, 116–117

  • in France, 70

  • recommendations for Japan, 141

  • recommendations for rebalancing China’s surplus, 107

  • upside scenario product market reforms for G20 countries, 154b

Regulation, financial

  • as cause of current account imbalances, 148

  • in development of U.K. imbalances, 50

  • in France, 69–70

  • in India, 81–84, 85–86, 86n, 90

  • strategies for addressing U.K. imbalances, 52–54

  • in the United States, 21, 24, 29–30, 34–35

S

Saving, private

  • as cause of current account deficits, 147, 148

  • in China, 93–95, 94f, 96–97, 98–101, 99f, 100f, 105f

  • corporate veil theory, 135b

  • in France, 57, 58f, 59f

  • in G20 countries, 42f

  • in Germany, 109, 112, 115, 116–117

  • in India, 73, 75–77, 76f, 83f, 84–85

  • in Japan, 125, 128, 134–137, 135f, 136f

  • sources of detrimental imbalances, 7

  • in the United Kingdom, 39, 40f, 41–42, 41f, 42f, 44–45, 46–48

  • in the United States, 24, 25, 28, 32, 36

Saving, public

  • causes of current account surpluses, 147

  • in China, 93–94, 94f, 104, 148–149

  • cross-border policy effects, 13–14

  • in France, 57, 59f

  • in Germany, 116

  • in India, 75

  • in Japan, 128

  • model of cross-border policy effects, 16–18

  • sources of detrimental imbalances, 7

  • strategies for addressing external imbalances, 147–148

  • in the United Kingdom, 40–41, 40f, 41f, 45–46, 51

  • in the United States, 21, 22f, 24, 36

Seoul summit, 3

Social assistance programs

  • in China, 101, 106

  • in India, 78, 79, 88–89

  • See also Entitlement spending

Social security spending

  • in France, 57, 59, 60–61

  • in Japan, 126, 133, 134f

  • in the United States, 23b, 27–28, 34

Stability and Growth Pact, 59, 109, 118

State-owned enterprises

  • Japanese saving and insurance institutions, 138

  • recommendations for China’s, 107

  • sources of China’s economic growth, 97–98, 99–100, 101

Subsidies

  • China’s factor market distortions, 99, 107

  • India’s, 88

Surpluses, current account

  • causes of Germany’s, 112–118

  • in export-led growth strategy, 12

  • influences on public saving behavior and, 147–148

  • in Japan, 127, 127f

  • model of spillover effects, 16–18

  • multilateral implications, 11, 12–14

  • multilateral surveillance rationale, 15

  • patterns and trends in Germany, 109–112, 110f

  • policy implications from case studies, 149, 150, 159

  • positive and negative sources, 10, 12

  • in recent German history, 109–112, 110f

  • saving imbalances as cause of, 147

  • as source of global financial crisis, 13–14

  • strategies for reducing Germany’s, 119–123

  • structural reform needs in advanced economies, 150–151

  • See also China, external surpluses in

Surveillance

  • rationale, 14–15

  • risk indicators, 11

T

Tax policy and collection

  • in France, 70–71, 71

  • in Germany, 111, 121f, 122f

  • in India, 78, 79–81, 87–88, 90

  • international comparison, 80f

  • in Japan, 132–133, 133t, 136–137, 141–142

  • strategies for addressing Germany’s imbalances, 120, 122, 123, 123n

  • strategies for improving U.S. economy, 34, 35

  • in the United Kingdom, 48–49, 49f, 52

  • upside scenario policy reforms for G20 countries, 152, 153b

  • in the United States, 22, 23b, 26, 26n, 27, 34, 35

U

U.K. See United Kingdom

United Kingdom (U.K.)

  • causes of imbalances in, 39, 46–50, 148

  • credit conditions, 47, 50

  • development of imbalances in, 39–45

  • Financial Policy Committee, 52, 53

  • financial sector, 48–49, 50, 52–53

  • future prospects, 45–46, 50

  • global implications of imbalances in, 50–51, 54

  • household wealth and debt trends, 43–45, 43f, 44f

  • interest rates, 47, 50

  • monetary policy, 51–52

  • policy responses to financial crisis, 45–46

  • private consumption in, 39, 42, 43f, 46

  • private investment in, 40f, 41, 42, 42f, 46

  • private saving in, 39, 40f, 41f, 42f 41–42, 44–45, 46–48

  • productivity issues, 42

  • public debt, 45–46, 45f, 48–49

  • public saving in, 40–41, 40f, 41f, 45–46, 51

  • rationale for addressing imbalances in, 50

  • strategies for addressing imbalances in, 39, 51–54, 149

  • sustainability assessment, 5–6b

  • tax policy and collections, 48–49, 49f, 52

United States (U.S.)

  • causes of external imbalances, 21, 28–31, 148

  • causes of internal imbalances, 23b, 26–28

  • defense spending, 22, 23b, 26

  • development of deficits in, 21–25, 22f

  • exchange rates, 30, 31

  • financial regulation in, 21, 24, 29–30, 34–35

  • foreign investment in, 24, 25f, 26f, 30–31, 30f, 32

  • future challenges, 21, 32–33

  • global significance of economy of, 32–33

  • home equity extractions preceding financial crisis, 24, 24f

  • housing boom, 7n, 24, 25, 28, 29, 30

  • interest rates, 24, 25, 29, 31, 33

  • labor market, 34, 154b

  • national saving and investment, 21, 22f, 24, 36

  • onset and effects of financial crisis, 25, 27, 29

  • PAYGO rule, 28, 28n

  • private consumption in, 21

  • private investment in, 24

  • private saving in, 24, 25, 28, 32, 36

  • public debt, 27, 28, 31, 32f, 33

  • rationale for addressing imbalances in, 31

  • rebalancing strategies, 21, 33–36, 149

  • social welfare and entitlement spending, 23b, 27–28, 34, 35

  • sustainability assessment, 5–6b

  • tax policy and collection, 22, 23b, 26, 26n, 27, 34, 35

Upside scenario

  • policy reforms under, 150–155

  • simulated gains from, 155–158, 156f, 157f

U.S. See United States

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