The United States as a debtor nation / William R. Cline.

Format:

Book

Author/Creator:

Cline, William R.

Contributor:

Center for Global Development.

Institute for International Economics (U.S.)

Language:

English

Subjects (All):

Debts, External--United States.

Debts, External.

Balance of trade--United States.

Balance of trade.

Investments, American.

United States--Commercial policy.

United States.

Physical Description:

1 online resource (325 p.)

Edition:

1st ed.

Place of Publication:

Washington, DC : Institute for International Economics : Center for Global Development, 2005.

Language Note:

English

Summary:

The United States has once again entered into a period of large external imbalances. This time the current account deficit, at nearly 6 percent of GDP in 2004, is much larger than in the last episode, when the deficit peaked at about 3.5 percent of GDP in 1987. Moreover, the deficit is on track to become substantially larger over the next several years. This study examines whether the large and growing current account deficit is a problem, and if so, how the problem can be solved. A central policy conclusion of this study is that it is increasingly important that the United States reduce its external current account deficit. This deficit is no longer benign as it arguably was in the late 1990s when it was financing high investment instead of high consumption and large government dissaving.

Contents:

Cover

Contents

Preface

Acknowledgments

Overview

Chapter 1 The International Debt Cycle and the United States as an External Debtor

The Debt Cycle

Measuring the Net International Investment Position

The Debt Cycle in Practice

The Global Balance Sheet Discrepancy

Debt Cycle Status and Growth Performance

Appendix 1A Estimating the Net International Investment Position

Chapter 2 Valuation Effects, Asymmetric Returns, and Economic Net Foreign Assets

US Valuation Effects

US Asymmetric Capital Returns

Capital Services and Economic Versus Accounting Net Foreign Assets

Alternative Measures: Cash Flow Versus Debt Burden

Appendix 2A

Chapter 3 Projecting the US Current Account Deficit and Net Foreign Assets

A Simple Projection Model

Calibration and Data

Identifying the Exchange Rate Lag

Backcast Performance

Baseline Projections

Comparison with Other Projections

Adjustment Scenarios

Impact Parameters

Chapter 4 US Fiscal Imbalance and the External Deficit

Understanding the Linkages

From Fiscal Surplus to Deficit

The Decline in Personal Saving

Fiscal Outlook for 2005-10

Long-Term Fiscal Problem

General Equilibrium Framework

Toward Fiscal and External Adjustment

Appendix 4A A Simple General Equilibrium Model Relating the Trade and Fiscal Balances

Chapter 5 Sustainability of the US Current Account Deficit and the Risk of Crisis

US Share in Global Portfolios

Debt Ratios and Critical Thresholds

Hard Landing, Long-Term Burden, and Protectionist Pressures

The Evolving Crisis Debate

Appendix 5A Key Features of Leading Recent Analyses

Chapter 6 Impact of the US External Imbalance on the Rest of the World

Impact on Global Demand

Impact on Interest Rates

Emerging-Market Capital Supply and Current Account Performance.

Developing-Country Reserves: Burden or Bonanza?

East Asian Exchange Rate Rigidity

Achieving Global Adjustment

Appendix 6A Optimal Exchange Rate Realignment

Appendix 6B Recent Alternative Profiles Proposed for Global Adjustment

Chapter 7 Principal Findings and Policy Implications

The International Debt Cycle

Valuation Effects, Asymmetric Returns, and Economic Net Foreign Assets

Forecasting the US Current Account Deficit and Net Foreign Assets

The Role of Fiscal Adjustment

Sustainability and Risks of the Current Account Deficit

Global Impact of US External Imbalance

Policy Implications

References

Index.

Notes:

Bibliographic Level Mode of Issuance: Monograph

Includes bibliographical references (p. 283-290) and index.

ISBN:

9786611061012

9781281061010

1281061018

9780881324686

088132468X

9781435609150

1435609158

OCLC:

216947286