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Correcting US Imbalances

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  • Ali Al-Eyd
  • Ray Barrell
  • Olga Pomerantz

Abstract

In the January Review discussion of the US current account imbalances, we explored the links between the US current account deficit and exchange rates, and focused on the economic adjustments required to correct the US ‘triple’ deficits. Using NiGEM, we illustrated that a sustained adjustment in the US current account deficit cannot be achieved through a temporary nominal depreciation alone – whether risk or policy driven – but also requires a redressing of the government and household imbalances and a consequent increase in national savings.
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Suggested Citation

  • Ali Al-Eyd & Ray Barrell & Olga Pomerantz, 2005. "Correcting US Imbalances," National Institute Economic Review, National Institute of Economic and Social Research, vol. 192(1), pages 33-39, April.
  • Handle: RePEc:sae:niesru:v:192:y:2005:i:1:p:33-39
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    Cited by:

    1. repec:bfr:quarte:2014:38:02 is not listed on IDEAS
    2. John Williamson, 2009. "Exchange Rate Economics," Open Economies Review, Springer, vol. 20(1), pages 123-146, February.
    3. Rivaud, S., 2015. "Impacts macroéconomiques internationaux des réformes structurelles," Bulletin de la Banque de France, Banque de France, issue 200, pages 91-105.
    4. Dibooglu, Sel & Kapounek, Svatopluk, 2021. "The US current account, sustainability, and the international monetary system," Economic Systems, Elsevier, vol. 45(4).
    5. Das, Dilip K., 2009. "The evolution of renminbi yuan and the protracted debate on its undervaluation: An integrated review," Journal of Asian Economics, Elsevier, vol. 20(5), pages 570-579, September.

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