This volume collects the eleven original papers that were written for the NBER Project on G7 Current Account Imbalances. Four major themes emerged from the papers written for the project. First, there was broad agreement that the current account imbalances that prevailed among the G7 countries as of June 2005 would ultimately decline, although there was no consensus on when or how this would occur . Second, there was agreement that adjustments in global currency markets would likely be associated with the shifts in global saving and investment patterns that would be required to bring about the ultimate decline in G7 current account imbalances. Third, while the focus of the conference was on current account imbalances in the G7 countries, it was recognized that the aggregate excess of saving over investment that existed among the emerging market economies at the time of the conference, as well as the currency intervention policies of some of these countries, were contributing to the current imbalances in the G7 that prevailed as of June 2005. Fourth, there was a consensus that re-valuation of the evolving foreign asset and liability positions of the G7 countries would play a role during process by which current account imbalances narrowed, although there was range of opinion concerning how large a role such revaluation effects would play.
Focus areas: Estimating ex ante risk premia in spot exchange rates with information from inflation indexed bond yields, international financial adjustment, global credit cycle, theory and empirics of optimal monetary policy in open economies
Richard H. Clarida is the C. Lowell Harriss Professor of Economics and International Affairs at Columbia University where he has taught since 1988. From February 2002 until May 2003, Clarida served as the Assistant Secretary of the United States Treasury for Economic Policy, a position that required confirmation by the US Senate. In that position, he served as chief economic advisor to the Treasury Secretary, and advising him on a wide range economic policy issues, including the U.S. and global economic prospects, international capital flows, corporate governance, and the maturity structure of U.S. debt. In May 2003 Treasury Secretary John Snow presented Clarida with The Treasury Medal in recognition for his record of outstanding service to the Treasury Department.
From 1997 until 2001, Clarida served as chairman of the Department of Economics at Columbia University. Earlier in his career, Clarida taught at Yale University and served in the Administration of President Ronald Reagan as Senior Staff Economist with the President's Council of Economic Advisers.
Clarida has published numerous and frequently cited articles in leading academic journals on monetary policy, exchange rates, interest rates, and international capital flows. He is frequently invited to present his views and research to the world's leading central banks, including the Federal Reserve, the ECB, the Bank of England, and the Bank of Japan. He has also served as a consultant to several prominent financial firms, including the Global Foreign Exchange Group at Credit Suisse First Boston and Grossman Asset Management. Since 2006, he has been Global Strategic Advisor with PIMCO. He is a member of the Council on Foreign Relations and the National Bureau of Economic Research. Clarida was director of the NBER Project on and Editor of G7 Current Account Imbalances: Sustainability and Adjustment (University of Chicago Press: 2007). Since 2004, he has served as co-editor of the NBER International Macroeconomics Annual and since 2009 as Co-Managing Editor of the Journal of Applied Financial Economics. Clarida received his BS from the University of Illinois and his MA and PhD from Harvard University.