Global Imbalances, Declining Hegemony and the Need for a New Global
Governance
Pasquale Tridico1
University Roma Tre and New York University
tridico@uniroma3.it
The objective of the paper is to show that the recovery from the current economic
crisis in US and in EU requires a new policy paradigm and a new global governance. I
argue that, contrary to the recent austerity policies in EU and US, a new level of
government involvement is required in order to keep aggregate demand stable, make full
employment possible, and create a transparent financial sector, serving the real economy
and encouraging productive investments. Moreover, at global level, two main issues seem
to affect negatively the markets: first the lack of an independent international currency,
and second the instability of one of the biggest market, the Eurozone. The first needs a
wider international solution, the latter needs a political responses at EU level in order to
deepen integration.
Key words: global imbalances, global governance, international currency
JEL: F02, G01, 016

GLOBAL IMBALANCES… : FULL TEX

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۱ Pasquale Tridico is a Fulbright Scholar (2010-11) at the Center for European Studies (CES), New York
University (NYU), and Assistant Professor at the University Roma Tre, Department of Economics, Rome,
Italy. He wishes to thank the Belgium and Luxembourg Fulbright Commission and the US Government for
the Fulbright-Schuman fellowship. He is also grateful to Larry Wolff and to all the staff at the CES (where
he was Fulbright Visiting Scholar between October 2010 and March 2011) for the support, and to Richard
Wolff and Giovanni Scarano for their comments. The usual disclaimer applies.