In this paper, we take a systematic look at global imbalances. First, we provide a definition of the phenomenon, and relate global imbalances to widening external positions of systemically important economies that reflect distortions or entail risks for the global economy. Second, we provide an...

The influential work of Obstfeld and Rogoff argues that a closing-up of the US current account deficit involves a large exchange rate adjustment. However, the Obstfeld-Rogoff model works exclusively via demand-side channels and abstracts from possible supply-side changes. We extend the framework...

This paper analyses the incidence and severity of sudden stops in euro area countries before and after the introduction of the ECB’s asset purchase programmes. We define sudden stops as abrupt declines in private net financial inflows, i.e. total flows adjusted for EU and IMF loans and changes...

In light of recent global economic and geopolitical shocks threatening trade openness, this report aims to shed light on geoeconomic fragmentation and develops a rich set of new tools to assess its economic effects and implications for central banks. The report shows that, although global trade...

In this work, we analyse the most recent shifts in trade patterns amid increasing ge-oeconomic fragmentation. We document five facts about the recent reconfiguration of global, US and EU trade flows. First, a broad retreat from globalization is not tak-ing place. Second, selective decoupling...

In this work, we analyse the most recent shifts in trade patterns amid increasing ge-oeconomic fragmentation. We document five facts about the recent reconfiguration of global, US and EU trade flows. First, a broad retreat from globalization is not tak-ing place. Second, selective decoupling...