Research Article


DOI :10.26650/ISTJECON2019-0027   IUP :10.26650/ISTJECON2019-0027    Full Text (PDF)

The US Economy, Global Imbalances and Recent Development: A Critical Review

Kalim Siddiqui

The United States has been running deficits on current accounts since the early 1990s. The current account deficits and surplus have caused dislocations in both developing and advanced economies. A recent study by Bullard et al. (2017) noted that the US economy is still the world’s largest economy and, according to the authors, between 2008-15 there was an average annual shortfall of 20% in fixed capital investment due to the 2008 crisis which also adversely impacted GDP growth and output (Bullard et al., 2017). This study will discuss the recent development in the US economy and also global imbalances in a historical perspective in order to try to understand the current situation. The discussion also includes the recent rise in China’s economy and the international trade. The study concludes that the trade deficits on the current scale cannot continue forever. Closing the trade deficit will require a more equal distribution of world spending, meaning a fall in US spending and a rise in spending from the rest of the world. Policy measures should be taken to increase state spending rather than rely on debt-fuelled private consumption to resolve inadequate aggregate demands. The reform should be made so as to seek profits in the real economy rather than ‘finance financing finance’. Finance should be made less globalised.

JEL Classification : E50 , E60 , F30 , G15

PDF View

References

  • Amin, S. (2009). “Seize the Crisis!” Monthly Review, December. Retrieved from https://monthlyreview. org/2009/12/01/seize-the-crisis/ google scholar
  • Amin, S. (2015). “Contemporary Imperialism”, Monthly Review, July. Retrieved from https:// monthlyreview.org/2015/07/01/contemporary-imperialism/ google scholar
  • Ashman, S., & A. Callinicos. (2006). Capital Accumulation and the State System: Assessing David Harvey’s New Imperialism. Historical Materialism, 14(4): 107 –131. google scholar
  • Baran, P., & P. Sweezy. (1966). Monopoly Capital. New York City, New York: Monthly Review Press. google scholar
  • Bullard, S., Silvia J. E., & Iqbal, A. (2017). “Can We Estimate the Cost of a Recession?” American Economic Association Conference. (Accessed on 6 June 2018). Retrieved from www.aeaweb. org/conference/2017/preliminary/paper/bzQ4bKGK google scholar
  • Callinicos, A. (2009). Imperialism and Global Political Economy, Cambridge-Massachusetts: Polity Press. google scholar
  • De Cecco, M. (2012). Global Imbalances: Past, Present, and Future. Contribution to Political Economy, 31, 29–50. google scholar
  • Fine, B. (2013). Financialization from a Marxist Perspective. International Journal of Political Economy, 42(4), 47–66. google scholar
  • Ghosh, J. (2018). “Global Instability and the Development project: Is the Twenty-first Century Different?” European Journal of Economics and Economic Policies: Intervention, 15(2), 193–207. google scholar
  • Glyn, A. (2005). Imbalances of the Global Economy. New Left Review, 34, 5–37. google scholar
  • Harvey, D. (2004). The New Imperialism, Oxford, UK: Oxford University Press. google scholar
  • Harvey, D. (2005). A Brief History of Neoliberalism, Oxford, UK: Oxford University Press. google scholar
  • Hilferding, R. (2010). [1910]. Finance Capital, London, UK: Routledge & Kegan Paul. Itoh, M., & Lapavitsas C. (1999) Political Economy of Money and Finance, London, UK: Macmillan. google scholar
  • Kautsky, K. [1914]. Ultra-imperialism. (Accessed on 22 December 2018). Retrieved from https:// www.marxists.org/archive/kautsky/1914/09/ultra-imp.htm google scholar
  • Keynes, J. M. (1973). [1936]. The General Theory of Employment, Interest and Money, London, UK: McMillan/Palgrave. google scholar
  • Keynes, J. M. (1980). The Collected Writings of John Maynard Keynes, Volume XXV: Activities 19401944: Shaping the Post-War Economy, London, UK: Macmillan. google scholar
  • Kotz, D. (2018). “End of Neoliberal Era?” New Left Review, 113, 29–55, September-October. google scholar
  • Lenin, V. I. (1964). “Imperialism, the Highest Stage of Capitalism,” in Collected Works, vol. 22 Moscow, Russia: Progress Publishers, 1964; originally published [1916]. google scholar
  • Luxemburg, R. (1951). [1913]. The Accumulation of Capital, London, UK: Routledge and Kegan Paul. google scholar
  • Maddison, A. (1998). Chinese Economic Performance in the Long Run, Paris, France: OECD. google scholar
  • Marx, K. (1991). Capital, Volume 3, London, UK: Penguin. McBride, J. (2017). “The US Trade Deficit: How Much Does It Matter?,” Council on Foreign Relations, 17 October. Retrieved from https://www.cfr.org/backgrounder/us-trade-deficit-how-much-does-it Norfield, T. (2016). The City: London and the Global Power of Finance, London, UK: Verso. google scholar
  • Patnaik, P. (2009). The Value of Money, New York City, New York: Columbia University Press. google scholar
  • Patnaik, U., & P. Patnaik. (2016). A Theory of Imperialism, New Delhi, India: Tulika Books. google scholar
  • Robinson, W. (2004). The Theory of Global Capitalism: Production, Class and |State in the Transnational World, Baltimore, Maryland: John Hopkins University Press. google scholar
  • Siddiqui, K., & T. Dahle. (1989). “World Economy Heading Towards Recession”, Bergens Tidende, (in Norwegian) 3rd July, Bergen. google scholar
  • Siddiqui, K. (2016). “International trade, WTO and economic development”. World Review of Political Economy, 7(4), 424–450. google scholar
  • Siddiqui, K. (2017a). “The Bolshevik Revolution and the Collapse of the Colonial System in India”, International Critical Thought, 7(3), 418–437. Routledge Taylor & Francis. doi.org/10.1080/2159 8282.2017.1355743. google scholar
  • Siddiqui, K. (2017b). “Financialization and Economic Policy: The Issues of Capital Control in the Developing Countries”, World Review of Political Economy, 8(4), 564–589, winter, Pluto Journals. google scholar
  • Siddiqui, K. (2018a). “Capitalism, Globalisation and Inequality”, World Financial Review, November/ December, pp. 72-77. ISSN 1756-3763. Retrieved from http://www.worldfinancialreview. com/?p=36382 google scholar
  • Siddiqui, K. (2018b). “U.S. – China Trade War: The Reasons Behind and its Impact on the Global Economy”, The World Financial Review, November/December, pp. 62-68. ISSN 1756-3763. Retrieved from http://www.worldfinancialreview.com/?p=36411 google scholar
  • Siddiqui, K. (2019). “The US Dollar and the World Economy: A critical review”, Athens Journal of Economics and Business. Forthcoming. google scholar
  • SIPRI. (2018). The independent Resource on Global Ssecurity, Stockholm. Retrieved from https:// www.sipri.org/research/armament-and-disarmament/arms-transfers-and-military-spending/ military-expenditure google scholar
  • Wade, R. (2009). From Global Imbalances to Global Reorganisations. Cambridge Journal of Economics, 33(4), 539–562. DOI: 10.1093/cje/bep032. google scholar
  • Wade, R. (2017). The American Paradox: Ideology of Free Markets and the Hidden Practice of Directional Thrust. Cambridge Journal of Economics, 41: 859–880. DOI: 10.1093/cje/bew064. google scholar
  • Wien, B. R. (2010). “US Capital Productivity Decline Must be Reversed”, Financial Times, 17 February, London. google scholar
  • Willett, T. D., & E. M. P. Chiu. (2012). “Power Relations and the Political Economy of Global Imbalances”, Global Economic Review, 41(4), 341–360. google scholar
  • Wolf, M. (2008a). “Comments on Global Imbalances”, Financial Times, p. 13, 7 October, London. google scholar
  • Wolf, M. (2008b). “Why It is So Hard the Keep the Financial Sector Caged”, Financial Times, 6 February, London. google scholar
  • World Bank. (2017). Global Economic Prospects: A Fragile Recovery, June. World Bank: Washington DC-USA. google scholar

Citations

Copy and paste a formatted citation or use one of the options to export in your chosen format


EXPORT



APA

Siddiqui, K. (2019). The US Economy, Global Imbalances and Recent Development: A Critical Review. Istanbul Journal of Economics, 69(2), 175-205. https://doi.org/10.26650/ISTJECON2019-0027


AMA

Siddiqui K. The US Economy, Global Imbalances and Recent Development: A Critical Review. Istanbul Journal of Economics. 2019;69(2):175-205. https://doi.org/10.26650/ISTJECON2019-0027


ABNT

Siddiqui, K. The US Economy, Global Imbalances and Recent Development: A Critical Review. Istanbul Journal of Economics, [Publisher Location], v. 69, n. 2, p. 175-205, 2019.


Chicago: Author-Date Style

Siddiqui, Kalim,. 2019. “The US Economy, Global Imbalances and Recent Development: A Critical Review.” Istanbul Journal of Economics 69, no. 2: 175-205. https://doi.org/10.26650/ISTJECON2019-0027


Chicago: Humanities Style

Siddiqui, Kalim,. The US Economy, Global Imbalances and Recent Development: A Critical Review.” Istanbul Journal of Economics 69, no. 2 (Apr. 2021): 175-205. https://doi.org/10.26650/ISTJECON2019-0027


Harvard: Australian Style

Siddiqui, K 2019, 'The US Economy, Global Imbalances and Recent Development: A Critical Review', Istanbul Journal of Economics, vol. 69, no. 2, pp. 175-205, viewed 20 Apr. 2021, https://doi.org/10.26650/ISTJECON2019-0027


Harvard: Author-Date Style

Siddiqui, K. (2019) ‘The US Economy, Global Imbalances and Recent Development: A Critical Review’, Istanbul Journal of Economics, 69(2), pp. 175-205. https://doi.org/10.26650/ISTJECON2019-0027 (20 Apr. 2021).


MLA

Siddiqui, Kalim,. The US Economy, Global Imbalances and Recent Development: A Critical Review.” Istanbul Journal of Economics, vol. 69, no. 2, 2019, pp. 175-205. [Database Container], https://doi.org/10.26650/ISTJECON2019-0027


Vancouver

Siddiqui K. The US Economy, Global Imbalances and Recent Development: A Critical Review. Istanbul Journal of Economics [Internet]. 20 Apr. 2021 [cited 20 Apr. 2021];69(2):175-205. Available from: https://doi.org/10.26650/ISTJECON2019-0027 doi: 10.26650/ISTJECON2019-0027


ISNAD

Siddiqui, Kalim. The US Economy, Global Imbalances and Recent Development: A Critical Review”. Istanbul Journal of Economics 69/2 (Apr. 2021): 175-205. https://doi.org/10.26650/ISTJECON2019-0027



TIMELINE


Submitted09.12.2019
Accepted18.12.2019
Published Online31.12.2019

LICENCE


Attribution-NonCommercial (CC BY-NC)

This license lets others remix, tweak, and build upon your work non-commercially, and although their new works must also acknowledge you and be non-commercial, they don’t have to license their derivative works on the same terms.


SHARE




Istanbul University Press aims to contribute to the dissemination of ever growing scientific knowledge through publication of high quality scientific journals and books in accordance with the international publishing standards and ethics. Istanbul University Press follows an open access, non-commercial, scholarly publishing.