Hostname: page-component-848d4c4894-8bljj Total loading time: 0 Render date: 2024-06-26T02:38:41.009Z Has data issue: false hasContentIssue false
  • English
  • Français

Correcting US Imbalances

Published online by Cambridge University Press:  26 March 2020

Ali Al-Eyd ,
Ray Barrell  and
Olga Pomerantz
Get access Rights & Permissions [Opens in a new window]

Extract

In the January Review discussion of the US current account imbalances, we explored the links between the US current account deficit and exchange rates, and focused on the economic adjustments required to correct the US ‘triple’ deficits. Using NiGEM, we illustrated that a sustained adjustment in the US current account deficit cannot be achieved through a temporary nominal depreciation alone – whether risk or policy driven – but also requires a redressing of the government and household imbalances and a consequent increase in national savings.

Type
Articles
Information
National Institute Economic Review , Volume 192 , April 2005 , pp. 33 - 39
Copyright
Copyright © 2005 National Institute of Economic and Social Research

Access options

Get access to the full version of this content by using one of the access options below. (Log in options will check for institutional or personal access. Content may require purchase if you do not have access.)

References

Barrell, R. and Davis, E. P. (2004), ‘Consumption, financial and real wealth in the G-5’, NIESR Discussion Paper No. 232.Google Scholar
Blanchard, O., Giavazzi, F. and Sa, F. (2005), ‘The US current account and the dollar’, NBER Working Paper No. 11137, February.CrossRefGoogle Scholar
Cooper, R. (2001), ‘Is the US current acount deficit sustainable? Will it be sustained?’, Brookings Papers on Economic Activity, 1, pp. 217–226.CrossRefGoogle Scholar
Gagnon, J. (1996), ‘Net foreign assets and equilibrium exchange rates: panel evidence’, Board of Governors of the Federal Reserve System, International Finance Discussion Papers, No.574.Google Scholar
Gourinchas, P.O. and Rey, H. (2005), ‘International Financial Adjustment’, available from www.princeton.edu/%7EreyCrossRefGoogle Scholar
IMF (2005), World Economic Outlook: Globalisation and External imbalances, Washington DC, IMF.Google Scholar
Mann, C. (2003), ‘How long the strong dollar?’ in Bergsten, C.F. and Williamsn, J. (eds), Dollar Overvaluation and the World Economy, Washington, D.C., Institute for International Economics.Google Scholar
Obstfeld, M. and Rogoff, K. (1995), ‘The intertemporal approach to the current account’, in Grossman and Rogoff, K. (eds), Handbook of International Economics, Amsterdam, North Holland Press.Google Scholar
Obstfeld, M. and Rogoff, K. (2004), ‘The unsustainable US current account position revisited’, National Bureau of Economic Research, WP 10869.CrossRefGoogle Scholar
Wadhwani, S. B. (1999), ‘Currency puzzles’, speech at the London School of Economics, 16 September.Google Scholar