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Fiscal imbalance is a mismatch in the revenue powers and expenditure responsibilities of a government. Fiscal imbalances as differences in net fiscal benefits
Global imbalances refers to the situation where some countries have more assets than the other countries. In theory, when the current account is in balance, it has a zero value: inflows and outflows of capital will be cancelled by each other.
Financial imbalances that arise naturally or as a result of significant adverse and unforeseen events are dissipated when a financial system is in a range of stability. When the system is stable, it will primarily absorb shocks through self-corrective mechanisms, preventing adverse events from disrupting the real economy or other financial systems.
Global share of wealth by wealth group, Credit Suisse, 2021 Share of income of the top 1% for selected developed countries, 1975 to 2015. Economic inequality is an umbrella term for a) income inequality or distribution of income (how the total sum of money paid to people is distributed among them), b) wealth inequality or distribution of wealth (how the total sum of wealth owned by people is ...
[25] [26] [27] Ben Bernanke argues that "persistent imbalances within the euro zone are... unhealthy, as they lead to financial imbalances as well as to unbalanced growth. The fact that Germany is selling so much more than it is buying redirects demand from its neighbors (as well as from other countries around the world), reducing output and ...
[2] China's financial system favors the accumulation of large surpluses while the United States carries "large and persistent current account deficits" which has created a trade imbalance. [2] The authors note that, [2] Moreover, in practice, private capital often flows from developing to advanced economies.
The government fiscal balance is one of three major financial sectoral balances in the national economy, the others being the foreign financial sector and the private financial sector. The sum of the surpluses or deficits across these three sectors must be zero by definition. A surplus balance represents a net savings or net financial asset ...
For example, if there is a foreign financial surplus (or capital surplus) because capital is imported (net) to fund the trade deficit, and there is also a private sector financial surplus due to household saving exceeding business investment, then by definition, there must exist a government budget deficit so all three net to zero. The ...