Annual Conference
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International Macroeconomics, Money & Banking
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May 2019
Industrial Revolutions and Global Imbalances
Based on the historical data since 1845, we identify a stylized fact, that is, alternating waves in global imbalances generated by sequential industrial revolutions. We develop a new theory to explain this stylized fact. Our theory proposes a development-stage view for the optimal global imbalances. It explains the Lucas Paradox on capital flows as well as rises and falls of the external wealth of nations over time.
Keywords:
Global imbalance, external wealth, industrial revolution