Current Account Deficit (current + account_deficit)

Distribution by Scientific Domains

Kinds of Current Account Deficit

  • us current account deficit


  • Selected Abstracts


    WINNERS AND LOSERS FROM DOLLAR DEPRECIATION

    ECONOMIC AFFAIRS, Issue 1 2008
    Sergio Da Silva
    We examine the relationship between the US current account deficit, the international value of the dollar, and the dollar reserves of foreign central banks. The declining dollar could benefit US savers at the expense of foreign investors in the USA. [source]


    TWIN SONS OF DIFFERENT MOTHERS: THE LONG AND THE SHORT OF THE TWIN DEFICITS DEBATE

    ECONOMIC INQUIRY, Issue 4 2009
    KEVIN GRIER
    Interest in the twin deficits hypothesis fluctuates in tandem with the U.S. current account deficit. Surprisingly though, a statistically robust relationship between budget and trade deficits has been difficult to pin down. We argue that a big part of this difficulty is due to the failure to allow for structural breaks in the series when (either explicitly or implicitly) modeling their time series properties. We show that both series are break stationary (and conditionally heteroskedastic) and argue that while there is no common pattern in the long run, the short-run dynamics reveal a sizeable and fairly persistent positive relationship between budget deficit shocks and current account deficit shocks. (JEL F41, E6, H6) [source]


    Will there be a dollar crisis?

    ECONOMIC POLICY, Issue 51 2007
    Paul Krugman
    SUMMARY Will there be a dollar crisis? Almost everyone believes that the US current account deficit must eventually end, and that this end will involve dollar depreciation. However, many believe that this depreciation will take place gradually. This paper shows that any process of gradual dollar decline fast enough to prevent the accumulation of implausible levels of US external debt would impose capital losses on investors much larger than they currently expect. As a result, there will at some point have to be a ,Wile E. Coyote moment', a point at which expectations are revised, and the dollar drops sharply. It is much less clear, however, whether this ,crisis' will produce macroeconomic problems. , Paul Krugman [source]


    Do Crises Induce Reform?

    ECONOMICS & POLITICS, Issue 2 2001
    Simple Empirical Tests of Conventional Wisdom
    We find evidence for the crisis-induces-reform hypothesis at extreme values of the inflation rate and the black market premium. Episodes of extremely high inflation or black market premiums are followed by periods of better performance than episodes of moderately high inflation or black market premiums. We fail to find similar evidence of the crisis hypothesis when crisis is measured as a high current account deficit, a high budget deficit, or a negative per capita growth rate. The pattern of foreign aid disbursements may help explain the results. Foreign aid is reduced at extreme values of inflation or the black market premium, while it is actually increased for more extreme values of the current account deficit and the budget deficit. [source]


    China's Exchange Rate Policy, Its Current Account Surplus and the Global Imbalances,

    THE ECONOMIC JOURNAL, Issue 541 2009
    W. Max Corden
    This article is stimulated by current criticisms of Chinese exchange rate policy. The concern is really about China's current account surplus. The article discusses the factors that determine the surplus, and the reasons why the surplus increased sharply from 2005. The international implications of China's surplus and growth are discussed, and how it has affected the world real interest rate, and through that the US current account deficit. The surplus has had various international relative price effects, which have produced both gainers and losers. Finally, the surplus played only a small part in determining the world credit crisis. [source]


    Has International Trade in Saving Improved US Economic Welfare?

    THE ECONOMIC RECORD, Issue 2009
    ANTHONY J. MAKIN
    Over the past decade international policy-makers have perceived the current account deficit of the world's largest foreign borrower economy, the United States, as a threat to global economic and financial stability. Yet, by bridging the US domestic saving-investment gap, capital inflow that matched the huge US current account deficit also enabled a faster rate of domestic capital accumulation than home saving alone would have permitted. Consistent with the theory of international capital movements, this study identifies and compares the respective contributions of domestic and foreign saving to US gross domestic product per worker over the two decades prior to the onset of the US banking crisis. By revealing that foreign borrowing contributed significantly to raising US output and hence living standards over this period, it adds a new dimension to the debate about global imbalances. [source]


    Monetary Policy in a Small Open Economy with Marshallian Preferences,

    THE ECONOMIC RECORD, Issue 268 2009
    CONSTANTINE ANGYRIDIS
    We study the effects of inflation for a small open economy when the representative agent has Marshallian preferences, with which the rate of time preference is a decreasing function of savings. An increase in the inflation rate reduces the permanent income of the representative agent, which, with Marshallian preferences, also reduces the rate of time preference. Hence, savings falls and the country runs a current account deficit. The numerical evaluations of the model suggest that inflation has significant effects on welfare in the steady state. [source]


    Cross-country experiences and policy implications from the global financial crisis

    ECONOMIC POLICY, Issue 62 2010
    Stijn Claessens
    Summary The financial crisis of 2007--2008 is rooted in a number of factors, some common to previous financial crises, others new. Analysis of post-crisis macroeconomic and financial sector performance for 58 advanced countries and emerging markets shows a differential impact of old and new factors. Factors common to other crises, like asset price bubbles and current account deficits, help to explain cross-country differences in the severity of real economic impacts. New factors, such as increased financial integration and dependence on wholesale funding, help to account for the amplification and global spread of the financial crisis. Our findings point to vulnerabilities to be monitored and areas of needed national and international reforms to reduce risk of future crises and cross-border spillovers. They also reinforce a (sad) state of knowledge: much of how crises start and spread remains unknown. --- Stijn Claessens, Giovanni Dell'Ariccia, Deniz Igan and Luc Laeven [source]