Savings and Growth in an Interdependent World

Abstract

A major feature of the 1980s has been the large changes in current account balances in the world economy, reflecting changes in saving and investment balances in the major industrialized economies. The events of the 1980s raise a number of important questions: What are the implications of these current account developments and associated changes in government and private saving and investment behavior for world growth and the distribution of future consumption possibilities across countries?; What effects do changes in fiscal policies in different economies have on these outcomes?; How do the short run adjustments in the face of changes in policy assumptions compare to the long run outcomes under different assumptions about wage adjustment in the short run?KeywordsCapital StockCurrent AccountFiscal PolicyPotential OutputReal Exchange RateThese keywords were added by machine and not by the authors. This process is experimental and the keywords may be updated as the learning algorithm improves.