Long memory and regime switching properties of current account deficits in the US

2013 ◽  
Vol 35 ◽  
pp. 78-87 ◽  
Author(s):  
Shyh-Wei Chen
Keyword(s):  
Current Account ◽  
Long Memory ◽  
Regime Switching ◽  
Current Account Deficits ◽  
The Us

The Economic Consequences of Higher Investment

2019 ◽  
pp. 127-135
Author(s):  
Andrew Smithers
Keyword(s):  
Public Sector ◽  
Interest Rates ◽  
Current Account ◽  
Economic Consequences ◽  
Fiscal Deficits ◽  
Share Prices ◽  
Current Account Deficits ◽  
The Us ◽  
Domestic Savings ◽  
Corporate Cash Holdings

Increased investment is essential to restore growth, but this will require higher savings as well as higher investment. Subject to the limited amount of help likely from rising current account deficits, domestic savings will need to rise at the expense of consumption. This will be unpopular. Those who claim that high corporate cash holdings mean that additional investment can be financed without more savings are confusing stocks with flows. Equally at fault are those who think that additional public sector investment will be painless because interest rates are so low. Companies in the US are the only major sector which is a habitual buyer of equities. Additional corporate investment will lead to fewer buy-backs, lower share prices, and higher household savings. This will narrow the savings gap, but fiscal deficits are highly correlatated with corporate net savings, so rising taxes are likely to be needed if investment rises.

The World Economy

2005 ◽  
Vol 192 ◽  
pp. 11-32
Keyword(s):  
North America ◽  
Exchange Rates ◽  
Current Account ◽  
Risk Premium ◽  
World Economy ◽  
Strong Growth ◽  
Current Account Deficits ◽  
The Us ◽  
The World ◽  
Major Shift

Growth in the world economy looks robust, with growth averaging over 4 per cent a year in the last 2 years and in the first two years of our forecast. Strong demand in North America is a major factor behind this growth, and it has been associated with increasing current account deficits for the US, as we can see in Chart 1. The emerging imbalances that this strong growth has produced present a major risk to the world economy as they may induce major realignments of exchange rates. We analyse the implications of a major shift in the risk premium on the dollar in Al-Eyd, Barrell and Pomerantz in this Review.

Monetary Policy and Global Imbalances

2007 ◽  
Vol 199 ◽  
pp. 34-39 ◽  
Author(s):  
Ray Barrell ◽  
Ian Hurst
Keyword(s):  
Monetary Policy ◽  
Exchange Rate ◽  
Current Account ◽  
First Year ◽  
Sustained Improvement ◽  
J Curve ◽  
The Us ◽  
Curve Effect ◽  
Noticeable Improvement ◽  
The Current Account

The US current account imbalance has stayed stubbornly high despite the fall in the dollar that we have seen since the beginning of 2003. The exchange rate has fallen by around 15 per cent on average, mainly between the first quarter of 2003 and the first quarter of 2005. As we can see from figure 1, the fall has come in three steps, and each time it fell we might have expected an initial worsening of the current account for a year or so as prices change in advance of quantities (the J curve effect of the first year textbook). Hence we might have expected no sustained improvement until at least a year after the last downward step towards the end of 2004. However, as we can see from figure 2, there is no noticeable improvement in the current account during 2006, suggesting that domestic absorption was rising. At the same time inflation in the US was gradually drifting up under pressure from the weakening exchange rate.

Sign in / Sign up

Export Citation Format

Share Document