Research On U.S. Economic Imbalance And Its Impacts On The World Economy

U.S. economic imbalances which registers as the continuing and growingcurrent account deficit, has been the hot spots and the focus that the governments,academics and industry concerned about. Although there are a lot of research resultsand the corresponding strategy, but the views are divergent. Based on the analysis ofthe characteristics and nature of U.S. economic imbalances, This paper attempts tostudy the formation mechanism of the U.S. economic imbalances from theperspective of the fictitious economy.what’s more, this paper also involved relatedimportant issues, such as the influence on the world economy, the persistence of theU.S. economic imbalances and how to weaken the imbalance, the risk china facingand its coping strategies.This thesis consists of nine chapters, the first chapter is an introduction, mainlydescribing the research background and research themes, the significance of this study,research methods and technologies routes are also included in this chapter.Chapter II is the literature review, where the author summarized the literature onthe economic imbalances in the United States, classified the main ideas andconclusions, introduced the relevant literature within the field of fictitious economy,Meanwhile, at the end of this chapter, a review on the above literature is provided as aguidance for follow-up study.Chapter III worked over the characteristics and the nature of the U.S. economicimbalances.First, The U.S. economic imbalances has the following characteristics：thescale of the imbalance increases continuously and the imbalance has maintained for along time, the exchange rate adjustment mechanism is almost invalid, themanufacturing trade deficit is the main source of the imbalances, and U.S. economicimbalance is the imbalance of the world economy in large degree. Second, The U.S.economic imbalances is essentially the result of changes in economic structure andcontinued international capital flowing into the United States. The structural changesin the U.S. economy mainly registers as the changes in the demand structure andproduction structure, that is, lack of demand for investment relative to consumptiondemand and declining weight of manufacturing in the economy. ChapterⅣ analyzes the facts and discussed the theoretical mechanisms that theU.S. economy to be more and more fictitious.According to the fictitious economytheory, the author constructed corresponding indicator system to measure the the U.S.fictitious economy,data shown that after1970s, the fictitious degree of the U.S.economy continuously increased, the fictitious economy has become America’s coreeconomy. The study concluded that: the U.S. dollar to be fictitous and world standardcurrency status, promoting economic growth, getting the interests of global economy,financial liberalization and globalization， maintenance of dollar hegemony areimportant driving forces for the U.S. economy to be more fictitious.ChapterⅤ analyzed the impact of the fictitious economy on the U.S. economicimbalances from the perspective of economic demand structure. The theoreticalmodel analysis of this chapter showed that the fictitious economy’s asymmetricimpact on consumer demand and investment demand cause the imbalance betweenconsumer and investment, that is demand for investment is relative lack of consumerdemand in the economy.As investment demand is productive, so this will lead tolong-term economic imbalance between savings and investment, its externalperformance is the continuing current account deficit. Empirical test results whichbased on the using of U.S. data show that fictitious economy has no effect oninvestment, and has a negative impact on saving, that is, the impact on investmentand saving is asymmetry, which led to the current account continued to a huge deficitand continue to strengthen.ChapterⅥ analyzed the impact of the fictitious economy on the U.S. economicimbalances, especially on the continuing huge trade deficit in the manufacturingsector from the perspective of economic production structure. Theoretical analysisshows that the fictitious economy’s combined effects of transfer resources,spendingand investment could lead to a declining share of manufacturing in the economy.Asthe demand for the manufacturing sector is relatively stable, so economy to be morefictitious will lead to the manufacturing sector continued huge trade deficit. Theempirical results using U.S. data show that the U.S. fictitious degree of economy isthe important factors for the declining share of manufacturing sector in the economy;ChapterⅦ analyze the impact of th e fictitious economy on the U.S. economicimbalances from the perspective of international capital flows. As the U.S. dollar is the world’s monetary standard, the fictitious economy of the U.S. has changed thesupply and demand structure of the world asset markets, exacerbating thenon-balanced development of the international asset markets, making moreinternational funds flow into the U.S. As a result, U.S. capital account maintained asustained surplus, and sustained deficit in the current account. The author establishedcorresponding theoretical models to analyse the mechanism.ChapterⅧ researched the influence of the U.S. economic imbalances on theworld economy. The content of this chapter includes: the persistence of the U.S.economic imbalances, the adjustment of the U.S. economic imbalances, the influenceof the U.S. economic imbalances on china economy and our coping strategies. Theresults shown that the world economy would face greater risks because of the U.S.economic imbalances. As the United States can obtain a global economic interests inthe economic imbalances, there is no driving force to seek a fundamental solution tothe economic imbalances. The U.S. economic imbalance is rooted in the U.S.fictitious economy, the fundamental solution requires the joint efforts of all parties.China plays an important role in the current U.S. economic imbalances, chinaeconomy is facing a greater risk, we should take appropriate measures—from everyaspect such as the real economy, fictitious economy, as well as the internationalmonetary system—to cope with the risks and challenges brought by the U.S.economic imbalances.ChapterIX is the conclusions of this thesis. This chapter gives the mainconclusions, and points out the lack of the research as well as future researchdirections.This study provides a standardized framework for the U.S. economic imbalancesfrom the perspective of the fictitious economy, which is an important theorydevelopment. Meanwhile, this thesis studies the continuing deficit of the U.S. currentaccount from the perspective of the economic structure and international capital flowswhich is an important complement to the existing research literature and innovationpoint.