The consequences of global trade and financial disbalances in contemporary economy

The aim of this paper is to critically examine free trade, free flow of goods and capital, as well as the possibility of using privileged market position and economic and political measures that stem from it. The critical review is based on the fact that not all economies (countries) that enter international trade benefit from it. Countries participate in world trade in order to achieve current account surplus and to attract international capital which will increase their employment and production. Given that, all countries cannot have surpluses at the same time, some have current account deficits. Economies with deficit are usually in crisis and their employment and production will fall beyond the level of countries that do not engage in international exchange. Accordingly, this study is based on an analysis of global economic disbalances and the role of international financial institutions (WTO, IMF and World Bank) in promoting them.