G7 Current Account Imbalances: Sustainability and Adjustment
Richard H. Clarida
Abstract
The current account deficit of the United States is more than six percent of its gross domestic product—an all-time high. And the rest of the world, including other G7 countries such as Japan and Germany, must collectively run current account surpluses to finance this deficit. How long can such unevenness between imports and exports be sustained, and what form might their eventual reconciliation take? Putting forth scenarios ranging from a gradual correction to a crash landing for the dollar, this book brings together economists from around the globe to consider the origins, status, and future ... More
The current account deficit of the United States is more than six percent of its gross domestic product—an all-time high. And the rest of the world, including other G7 countries such as Japan and Germany, must collectively run current account surpluses to finance this deficit. How long can such unevenness between imports and exports be sustained, and what form might their eventual reconciliation take? Putting forth scenarios ranging from a gradual correction to a crash landing for the dollar, this book brings together economists from around the globe to consider the origins, status, and future of those disparities. Its collaborators here examine the role of the bursting of the dot-com bubble, the history of previous episodes of current account adjustments, and the possibility of the Euro surpassing the dollar as the leading international reserve currency. Although there are areas of broad agreement—that the imbalances will ultimately decline and that currency revaluations will be part of the solution—many areas of contention remain regarding both the dangers of imbalances and the possible forms of adjustment.
Keywords:
gross domestic product,
G7 countries,
current account deficit,
current account surpluses,
imports,
exports,
dollar,
dot-com bubble,
current account adjustments,
Euro
Bibliographic Information
| Print publication date: 2007 |
Print ISBN-13: 9780226107264 |
| Published to Chicago Scholarship Online: February 2013 |
DOI:10.7208/chicago/9780226107288.001.0001 |
