OECD Economic Studies No. 38 Volume 2004 Issue 1: The Challenges of Narrowing the US Current-Account Deficit and Implications for Other Economies

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In this Subject: Economics

Source: OECD Economic Studies, Volume 2004, Number 1, March 2005 , pp. 214-255(42)

Publisher: OECD - Organisation for Economic Co-operation and Development

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Abstract:

This article uses the OECD's interlink model to explore several possible channels through which a narrowing of the US current account deficit could occur. The shocks considered include dollar depreciation, fiscal consolidation, and an improvement in the non-price competitiveness of US producers. A key conclusion is that shocks would have to be very large in order to materially reduce the US external deficit, largely because of the offsetting impact of second-round effects. In addition...

Document Type: Review article

Publication date: 2005-03-01