Global imbalances: Causes and consequences of manifestations in the modern economy

Abstract

Subject. The article addresses imbalances as a characteristic feature of today's global economy. Imbalances restrain the development of national economic systems and impact negatively upon the global economy. Nowadays, there is a tendency towards sustainability of global imbalances. Objectives. The aim is to conduct a comprehensive study of reasons and consequences of global imbalances, elaborate methodological framework for increasing the effectiveness of global imbalances regulation to ensure the sustainability of the global economy. Methods. The study employs methods of scientific abstraction, induction, deduction, synthesis, and comparative analysis. Results. Imbalances in today’s world economy are a result of uneven economic development of certain countries and regions. The countries that lead the new technological mode are able to increase significantly their exports. They have large trade surpluses. On the contrary, importing countries face problems to reduce a trade deficit. Such a situation leads to sharpening the problem of international regulation of balance of trade deficits and surpluses. Conclusions. Uneven economic development is the main reason for imbalances. Its acceleration depends on creation of new technologies and new types of products. This process leads to structural shifts in national economies. Under these conditions, a group of countries exporting new products and technologies is formed. Balance of trade and balance of payments of these countries show a surplus. But imbalances have a negative impact on exchange rate formation mechanism, stability of international trade and capital movement. Such a situation implies policies to correct imbalances.