Global Imbalance: Based On The Perspective Of The International Monetary System

The global imbalance is a persistent financial phenomenon, which could betraced back to the time of Gold Standard. Due to its lasting period of time, the widerange and its huge size, this round of global imbalance, which is also widely attributedto the cause of the2008financial crisis, has attracted high attention. The economistshave given different kinds of reasons, hypotheses and theories for this phenomenon,including the global saving glut, the twin deficits, the GDP growth, the financialmarket and labor division and population. The current international monetary andfinancial system is also attributed to this phenomenon. The research on this matter isof important theoretical and practical importance.Based on the previous research on the global imbalance, this paper, with3critical indicators of UNDERVAL, ERA and REV, using the samples of30countriesranging from1990to2010, takes the empirical approach to further explain thisphenomenon. Our research has shown that global imbalance has close connectionwith the international monetary system. According to the sample and regressionmodel, no matter whether we add other variables or not, the following conclusioncould be drawn, which is the deviation of real exchange rate, the floating degree ofthe exchange rate arrangement and the level of the official reserve assets of onecountry have positive correlation with the size of the imbalance of the current accountof that country. The root cause of the global imbalance is attributed to the fact thatunder the current international monetary system the sovereign currency have beenused as the international reserve currency, which leads to the Triffen dilemma. In theend, this article has made some reflection on the new normal of China from the viewof restructure the pattern of economic growth, the reform of international monetarysystem and the Chinese foreign reserve strategy.