Analysis on structural changes and imbalances of the world economy

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A central economic challenge that the world faces is to how to re-balance the global current account imbalance. This research analyzes the problem and related policy issues from a perspective of currency misalignment. We find that the oft-used currency misalignment estimates are not robust to modifications in methodologies, assumptions, and data revisions. Based on these, we argue that a fundamental revision is necessary to the ongoing policy discussion for resolution of the problem.