Development and Determinants of the US Current Account Deficit
German Economic Institute (IW)
The US have been showing a current account deficit for some time. The reason is the enormously negative trade balance caused by net imports from many countries, including emerging markets in Asia, oil exporting countries and industrialized countries. By far the biggest net exporter of goods to the US is China, which experiences a massive and enduring economic boom fueled by strong investment and high export growth. In this context, some voices, mainly in the US, accuse the Chinese government of heavily boosting the country’s exports. There is some truth to these charges. However, the net capital import into the US which accompanies its current account deficit must be understood in the light of its long-lasting expansive monetary and fiscal policies. The net export of goods of a number of industrialized countries into the US is a result of structural differences and economic specialization.
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Development and Determinants of the US Current Account Deficit
German Economic Institute (IW)
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