Factor Mobility And Global Economic Imbalances

In recent years, with the growing global economic imbalances, scholars made a large number of research on the reason and trend, but there is no unified conclusion. In fact, the current global economic imbalances is not due to the short-term policy, nor the medium-term cyclical factors, instead, it is a result of the long-term historical factors, which means the international mobility of factors of production.On the face of it, the global economic imbalance is most conspicuous in the trade imbalances between the developed and emerging economies, but essentially, it is a result of international mobility of production factors. The capital factor is the most important fundamental factor. In order to obtain higher yields, the profit-driven capital usually flows from the low price area to the high price area. Asset stocks in developed countries is rich, the price of capital is lower, thus the capital outflow from the developed country, the purpose of foreign direct investment (FDI) is mainly to seek scarce labor factor. In essence, FDI is a form of capital factor mobility, meanwhile it causes the result of the global industrial transfer objectively. Asset stocks in emerging economies is poor, the price of capital is higher, thus the capital flows into the emerging economies, the large amounts of cheap labor factor is an important reason to attract foreign capital inflows, emerging economies accumulate rapidly substantial trade surplus through participating in the global industrial transfer, but the low value-added processing trade make it in the low-end position of the value chain based on international industrial division. Using its accumulated foreign exchange reserves, Emerging economies purchase a lot of financial assets in developed countries, sustaining the long-term huge trade deficit of developed countries. Therefore we can say, factor mobility is an important microeconomic cause of global economic imbalances.Economic globalization is an important environmental factor nowadays; factor mobility gradually evolves into the essential feature of world economy under the impact of economic globalization. This paper begins with the world economic crisis in2009, after a brief review of the world economic crisis, pointing out it is the crisis that revealed the global economic imbalances. Second, the paper has a brief overview of the global economic imbalances, and indicates that the global imbalances is a kind of objective economic phenomenon in the world economy, as well as an eternal phenomenon in the global economy homeostasis. The main feature of global imbalances is trade imbalances, in addition, the imbalances between the virtual and the real economy, and the imbalances between the allocation of resources and the development, are other two features. Then, the paper focuses on profiling the deep-seated cause of global economic imbalances, factor mobility in the economic globalization、the process and characteristics of global industrial transfer、factor mobility in the global industrial transfer、global economic imbalances under the impact of global industrial industry, through a step-by-step analysis, ultimately come to the conclusion that factor mobility is the important microeconomic cause of the global economic imbalances. Next, the paper built a mathematical model, and then uses the actual data in the quantitative analysis to verify the conclusion above. Finally, the paper analyzes the problem of the deficient validity about the post-crisis era response, at the same time, explores the new progresses of response in international organizations, the status of China in the global economic imbalances and response.