The Current Account Imbalance Under A View Of Globalization Of Labor

Since the second half of 2008, the international financial market has experienced a big turbulence. The subprime crisis in the U.S has not bottomed out at all, but became worse and worse. The imbalance of financial market has its root in real economies. Early before the spread of crisis in the U.S., the world economy has been experiencing a severe imbalance of the international payments—global current account imbalances, as demonstrated by the imbalances between developed countries and oil-exporting countries and East Asian countries, especially between the U.S. and East Asian countries.Basic knowledge of macroeconomics tells us that external imbalance also has its root within internal imbalance. So the external imbalances between the U.S. and East Asian countries have manifested the over-consuming for the U.S. and the over-saving for the East Asian countries. But why they over consumed and over saved? None of the existing theories could tell us! Perhaps the subprime crisis has given us some clues of why the U.S. over-consumed. But for the imbalance on the other hand there are still many issues to be studied.This article is just a trial answer based on the theoretical and practical questions above. On the macro-level we have put forward a new form of globalization of labor, that is, the emerging countries have realized the participation of their labor forces in global markets though the flow of goods which is formed with import and export of final products and outsourcing service of intermediate goods. On the other hand of the micro-level, we concern most of the East Asian countries as the dual economies in the views of economics for development. So that we put forward a theoretical model: the traditional "closed dual economy model" has been expanded to "open dual economy model". In the theoretical model the over-saving of the East Asian countries can be attributed to its own so-called double transition—the external transition for adapting to the globalization of labor and the internal transition for dual economies.Next we came to the empirical test for the theoretical model made above. We concluded from the empirical test that: the exchange rate factor in the impact of the current account is not so much as to image, which only affects parts of countries' current account. By contrast the labor factor for those who are in transitions for dual economies has indeed a significant impact on their current accounts. The successful transitions of emerging market countries are often accompanied by a continuing current account...