press release

Global imbalances-Is the world economy really at risk

Press release Dexia Asset Management
Global imbalances:
Is the world economy really at risk?
by Anton Brender and Florence Pisani, economists
at Dexia Asset Management
Brussels, April 23, 2007 - Anton Brender and Florence Pisani, publish their latest book Global Imbalances: Is the world economy really at risk? Ed. Dexia, 120p.
"Facing the enormous United States' current-account deficit, the Asian and oil-exporting countries have been accumulating equally spectacular surpluses. The most developed economy in the world is accordingly being financed to a massive extent by countries that are much less so. How has this situation come about? Is it as paradoxical as would appear at first sight? Can it be unwound without a catastrophe?"
The key point made in the study is that this financing of the world's richest country by the rest of the planet, essentially by emerging countries, is not really surprising. It is explained by the absence of a true international financial system and the unequal development of domestic financial systems in the different regions of the world. If the United States attracts so much capital, it is because it has a sophisticated financial system capable of absorbing it, and also because it implements policies aimed at maintaining the economy at full employment. After successive deflationary shocks since 2000, the United States has almost naturally become the borrower of last resort of the world economy.
An important question remains to be answered: to what extent is the resulting US indebtedness sustainable? Anton Brender and Florence Pisani show why, with the help of globalisation, the dollar is not doomed to collapse and the United States is not on the verge of insolvency. In contrast to a widely held view, the present global imbalances can unwind without monetary or financial cataclysms. But for such an orderly adjustment to happen, American household borrowing should continue to slowdown and monetary authorities have to cooperate in order not to destabilise the foreign exchange markets.
Anton Brender is Chief Economist of Dexia Asset Management. He is also Associate Professor at Paris-Dauphine University.
Florence Pisani is an Economist at Dexia Asset Management. She also teaches at Paris-Dauphine University.
Foreword by Olivier Blanchard, Professor of Economics at the Massachusetts Institute of Technology.
Other publications by the same authors:
  • America's new Economy (2005)
  • Les marchés et la croissance - Editions Economica (2001)
  • Le nouvel âge de l'économie américaine - Editions Economica (1999)
  • Les taux d'intérêt : Approche empirique - Editions Economica (1997)
The book is available upon request and can be downloaded from
About Dexia Asset Management
Dexia Asset Management, the asset management centre for the Dexia financial group, specialises in financial analysis, fund management and management of institutional and private mandates. As a first class European asset manager, Dexia AM manages some 105.2 billion euros of assets spread over a wide range of investment competences: traditional management, alternative management and sustainable and responsible investments. Dexia AM has management centres in Brussels, Luxembourg, Paris and Sydney and marketing teams in Belgium, France, Luxembourg, the Netherlands, Switzerland, Italy, Spain, Scandinavia, Germany, Austria, Australia and Bahrain.
Press Contact: Ulrike Pommée, + 32 2 213 50 81,