0
Your cart

Your cart is empty

Books > Social sciences > Politics & government

Buy Now

International Finance Discussion Papers - The U.S. Current Account Deficit and the Expected Share of World Output (Paperback) Loot Price: R441
Discovery Miles 4 410
International Finance Discussion Papers - The U.S. Current Account Deficit and the Expected Share of World Output (Paperback):...

International Finance Discussion Papers - The U.S. Current Account Deficit and the Expected Share of World Output (Paperback)

Charles Engel

 (sign in to rate)
Loot Price R441 Discovery Miles 4 410

Bookmark and Share

Expected to ship within 10 - 15 working days

We investigate the possibility that the large current account deficits of the U.S. are the outcome of optimizing behavior. We develop a simple long-run world equilibrium model in which the current account is determined by the expected discounted present value of its future share of world GDP relative to its current share of world GDP. The model suggests that under some reasonable assumptions about future U.S. GDP growth relative to the rest of the advanced countries -- more modest than the growth over the past 20 years -- the current account deficit is near optimal levels. We then explore the implications for the real exchange rate. Under some plausible assumptions, the model implies little change in the real exchange rate over the adjustment path, though the conclusion is sensitive to assumptions about tastes and technology. Then we turn to empirical evidence. A test of current account sustainability suggests that the U.S. is not keeping on a long-run sustainable path. A direct test of our model finds that the dynamics of the U.S. current account -- the increasing deficits over the past decade -- are difficult to explain under a particular statistical model (Markov-switching) of expectations of future U.S. growth. But, if we use survey data on forecasted GDP growth in the G7, our very simple model appears to explain the evolution of the U.S. current account remarkably well. We conclude that expectations of robust performance of the U.S. economy relative to the rest of the advanced countries is a contender -- though not the only legitimate contender -- for explaining the U.S. current account deficit.

General

Imprint: Bibliogov
Country of origin: United States
Release date: February 2013
First published: February 2013
Authors: Charles Engel
Dimensions: 246 x 189 x 3mm (L x W x T)
Format: Paperback - Trade
Pages: 54
ISBN-13: 978-1-288-72792-6
Categories: Books > Social sciences > Politics & government > General
LSN: 1-288-72792-5
Barcode: 9781288727926

Is the information for this product incomplete, wrong or inappropriate? Let us know about it.

Does this product have an incorrect or missing image? Send us a new image.

Is this product missing categories? Add more categories.

Review This Product

No reviews yet - be the first to create one!

Partners