[OPE] Levy Economics Institute and world trade

"The Levy team concludes by arguing that expansionary fiscal and monetary policies by the United States and other countries will not be sufficient to restore balanced growth, and that a worldwide recovery of output must be accompanied by sustainable balances in international trade. In previous studies, the authors suggested that a dollar devaluation of 25 percent might do the trick, but they believe a much larger adjustment is now needed to dramatically expand U.S. exports on the order of 25 percent in the next three to four years. They conclude by saying that "it is inconceivable that such a large rebalancing could occur without a drastic change in the institutions responsible for running the world economy - a change that would involve placing far less than total reliance on market forces." http://www.levy.org/pubs/12-23-08.pdf

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Received on Sat Apr 4 09:26:09 2009