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1 edition of The U.S. current account and the dollar found in the catalog.

The U.S. current account and the dollar

by Olivier Blanchard

  • 306 Want to read
  • 25 Currently reading

Published by Massachusetts Institute of Technology, Dept. of Economics in Cambridge, MA .
Written in English

    Subjects:
  • Foreign exchange rates,
  • Econometric models,
  • Depreciation

  • About the Edition

    There are two main forces behind the large U.S. current account deficits. First, an increase in the U.S. demand for foreign goods. Second, an increase in the foreign demand for U.S. assets. Both forces have contributed to steadily increasing current account deficits since the mid-1990s. This increase has been accompanied by a real dollar appreciation until late 2001, and a real depreciation since. The depreciation has accelerated recently, raising the questions of whether and how much more is to come, and if so, against which currencies, the euro, the yen, or the renminbi. Our purpose in this paper is to explore these issues. Our theoretical contribution is to develop a simple portfolio model of exchange rate and current account determination, and to use it to interpret the past and explore alternative scenarios for the future. Our practical conclusions are that substantially more depreciation is to come, surely against the yen and the renminbi, and probably against the euro. Keywords: current account deficit, dollar, depreciation, appreciation, euro, portfolio choice, yen, renminbi. JEL Classifications: E3, F21, F32, F41.

    Edition Notes

    Other titlesUS current account and the dollar, United States current account and the dollar
    StatementOlivier Blanchard, Francesco Giavazzi, Filipa Sa
    SeriesWorking paper series / Massachusetts Institute of Technology, Dept. of Economics -- working paper 05-02 [2005], Working paper (Massachusetts Institute of Technology. Dept. of Economics) -- no. 05-02.
    ContributionsGiavazzi, Francesco, Sa, Filipa, Massachusetts Institute of Technology. Dept. of Economics
    The Physical Object
    Pagination57 p., [11] p. of plates :
    Number of Pages57
    ID Numbers
    Open LibraryOL24946255M
    OCLC/WorldCa60570553

    ) If Boeing barters a $ million plane to Mexico in exchange for $ million worth of hotel services on the Mexican coast, then the transaction would _____ a. contribute to a U.S. current account surplus because it is en export of merchandise that is paid for through an item in the financial account b. leave the U.S. current account. The current account deficit narrowed in IIIQ, the first significant drop since the dollar began its recent decline. This pattern—smaller deficit, depreciating dollar—suggests that investors’ diversification out of dollar-denominated assets has become a .

    Foreign Currency Account. Details For customers who want to combine the convenience of transactional banking, with hassle-free access to foreign currency. The Foreign Currency Current Account is available in 3 major currencies: U.S. Dollar, Pound Sterling, and .   The current account is a country's trade balance plus net income and direct payments. The trade balance is a country's imports and exports of goods and services. The current account also measures international transfers of capital. A current account is in balance when the country's residents have enough to fund all purchases in the country.

    This dollar/euro correction has been dramatic, and it is a necessary and stabilizing first step toward unwinding the U.S. current account deficits. However, further drops in the dollar’s value, while necessary, must be broader based, especially with regard to the bloc of nations whose domestic monetary authorities tightly manage the value of.   The International Dollar Standard and the Sustainability of the U.S. Current Account Deficit Ronald I. McKinnon For more than twenty years the world's richest, most mature industrial economy has drawn heavily on the world's limited pool of saving to support high consumption-in the s by the federal government, and in the s by households.


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The U.S. current account and the dollar by Olivier Blanchard Download PDF EPUB FB2

Get this from a library. The U.S. current account and the dollar. [Olivier Blanchard; Francesco Giavazzi; Filipa Sa; National Bureau of Economic Research.] -- "There are two main forces behind the large U.S.

current account deficits. First, an increase in the U.S. demand for foreign goods. Second, an increase in the foreign demand for U.S.

assets. Abstract taccountdeficits. First,anincrease intheforeigndemandforU.S. The U.S. Current Account and the Dollar Olivier Blanchard, Francesco Giavazzi, Filipa Sa.

NBER Working Paper No. Issued in February NBER Program(s):Economic Fluctuations and Growth Program, International Finance and Macroeconomics Program There are two main forces behind the large U.S. current account deficits. The U.S. Current Account and the Dollar Olivier Blanchard Francesco Giavazzi Filipa Sa ⁄ ⁄ MIT and NBER, MIT, NBER, CEPR and Bocconi, and MIT respectively.

Prepared for the BPEA meetings, April An earlier version, with the same title, was circulated as MIT WPJanuary We thank Ben Bernanke, Ricardo Caballero. ondimplyaninitialappreciationfollowedbyadepreciation, tedStatesappearstohave enteredthedepreciationphase.

Get this from a library. The U.S. Current Account and the Dollar. [Olivier Blanchard; Francesco Giavazzi; Filipa Sa] -- There are two main forces behind the large U.S.

current account deficits. First, an increase in the U.S. demand for foreign goods. Second, an increase in the foreign demand for U.S. assets. Both. The U.S. Current Account Deficit and The Dollar Olivier Blanchard paper available on web page 1.

The basic facts • Outcome depends on bilateral current account balances and portfolio preferences. • U.S. trade deficit in goods $ billion. Of this: $ with China.

International Investors, the U.S. Current Account, and the Dollar TWO MAIN FORCES underlie the large U.S. current account deficits of the past decade.

The first is an increase in U. The U.S. Current Account and the Dollar Olivier Blanchard Francesco Giavazzi Filipa Sa ⁄ Ma Abstract There are two main forces behind the large U.S. current account deflcits. First, an increase in the U.S.

demand for foreign goods. Second, an increase in the foreign demand for U. Downloadable. There are two main forces behind the large U.S. current account deficits. First, an increase in the U.S. demand for foreign goods. Second, an increase in the foreign demand for U.S.

assets. Both forces have contributed to steadily increasing current account deficits since the mids. This increase has been accompanied by a real dollar appreciation until late. Current account balance compares a country's net trade in goods and services, plus net earnings, and net transfer payments to and from the rest of the world during the period specified.

These figures are calculated on an exchange rate basis. "A Guide Book of Modern Unites States Dollar Coins" contains an overwhelming amount of information on the mostly shunned recent dollar coin issues. It does end on a positive note with a short essay on the rising numismatic interest in Eisenhower dollars/5(11).

With the U.S.’s combined fiscal and current-account deficit once again approaching 6 percent of gross domestic product, the long-term outlook for the dollar is bleak, according to Mark McCormick. International Investors, the U.S. Current Account, and the Dollar Article (PDF Available) in Brookings Papers on Economic Activity 71() February with.

The current account of the balance of payments includes a country's key activity, such as capital markets and services. CAB will tell whether a country is in a surplus or : Reem Heakal.

Observations that the dollar is over-valued imply that its current level is unsustainable and that its recent path is inconsistent with a growing U.S. current account (trade) deficit. Since mid, the real (inflation adjusted) dollar has appreciated 10%, while the. As the strong U.S. dollar causes exchange rate turbulence for developing countries, Brazil, Indonesia, and South Africa share common traits contributing to their dollar exchange rate volatility: fiscal and/or current account deficits and high public and/or private debt.

-the U.S. Government's unwillingness to balance the budget,-Asian and Middle Eastern countries growing less interested with "subsidizing" the value of the Dollar,-the solidifying of the Euro as an alternative global currency, and-the U.S.

consumer's never-ending desire to "borrow-and-buy" their way through life/5(21). The U.S. current account deficit, driven by the United States' widening trade deficit, is the largest it has ever been, both as a share of the U.S. economy and in dollar terms.

How much longer can the United States continue to spend more than it earns. Singapore's "Shadow" Intervention. It has a 20 percent of GDP current account surplus for a reason.* But it turned out the fall in the.

Persistent and large U.S. current account deficits indicated that the dollar was overvalued and the parity should be something higher than $35 per ounce of gold. This situation tempted investors into buying gold at the Bretton Woods price and selling at a higher price in the gold market.The U.S current account deficit versus the rest of the world steadily widened from onwards, reaching percent of GDP in the third quarter of 7 Economic theory says that when foreign currency exchange rates are floating freely, current account deficits should be short-lived because exchange rates should adjust to rebalance trade.fate of the U.S.

dollar and the U.S current account. This book is a collection of essays on this debate. The papers were presented at a conference in Washington D.C. on May 25thorganized by the Institute for International Economics.

The main questions that.