The Determinants of the Global Current Account Imbalances: An Empirical Analysis Based on Cross-country Data

The global current account imbalances is an uncertainty to influence the healthy development of the world economy,after years of accumulation,it has become an important hidden risk threatening the global economic vitality.This paper investigates the determinants of the current account by using the empirical studies of cover 56 countries or regions over a long time span(1980-2005),and the results show that the present global current account imbalances are closely related with the conditions of financial income and expenditure of governments of different countries.The financial income and expenditure of governments has a notable positive effect.Compared with labor productivity,the influence of the current account balance plays a relatively significant role in the developed countries.A negative effect can be easily found on the current account balance along with the degree of financial openness,however,there exists no obvious experiential proof of the effect of financial deepening on the income and expenses of the current account.Therefore,under the conditions of world economy growth slowing down and the global economy entering a new and unstable belt,only through an effective coordination of international economical policies,can the problem of the present global current account imbalance be orderly solved.