This website uses cookies.

By clicking the "Accept" button or continuing to browse our site, you agree to first-party and session-only cookies being stored on your device to enhance site navigation and analyze site performance and traffic. For more information on our use of cookies, please see our Privacy Policy.

  1. Home
  2. Journals
  3. Journal of Economic Perspectives
  4. Summer 2002
  5. Perspectives on the U.S. Current Account Deficit and Sustainability

Journal of Economic Perspectives

ISSN 0895-3309 (Print) | ISSN 1944-7965 (Online)

Perspectives on the U.S. Current Account Deficit and Sustainability

  • Catherine L. Mann
Journal of Economic Perspectives
vol. 16, no. 3, Summer 2002
(pp. 131–152)
Download Full Text PDF
(Complimentary)

Abstract

This essay considers the underpinnings of the large U.S. current account deficit. It then tackles the question of whether the U.S. current account deficit is sustainable. A current account deficit is "sustainable" at a point in time if neither it, nor the associated foreign capital inflows, nor the negative net international investment position are large enough to induce significant changes in economic variables, such as consumption or investment or interest rates or exchange rates. Even if the current account deficit is sustainable by this definition today, its trajectory could still be creating future risks for the U.S. and global economy.

Citation

Mann, Catherine, L. 2002. "Perspectives on the U.S. Current Account Deficit and Sustainability." Journal of Economic Perspectives, 16 (3): 131–152. DOI: 10.1257/089533002760278758

JEL Classification

  • F32 Current Account Adjustment; Short-term Capital Movements
There are no comments for this article.
Login to Comment