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The US as the "Demander of Last Resort" and its Implications on China's Current Account / Joshua Aizenman, Yothin Jinjarak.
- Format:
- Book
- Author/Creator:
- Aizenman, Joshua.
- Series:
- Working Paper Series (National Bureau of Economic Research) no. w14453.
- NBER working paper series no. w14453
- Language:
- English
- Physical Description:
- 1 online resource: illustrations (black and white);
- Place of Publication:
- Cambridge, Mass. National Bureau of Economic Research 2008.
- Summary:
- This paper evaluates the degree to which current account patterns are explained by the variables suggested by the literature, and reflects on possible future patterns. We start with panel regressions explaining the current account of 69 countries during 1981-2006. We identify an asymmetric effect of the US as the "demander of last resort:" a 1% increase in the lagged US current account deficit is associated with 0.5% increase of current account surpluses of countries running surpluses, but with insignificant changes of current account deficits of countries running deficits. Overall, the panel regressions account for not more than 2/3 of the variation. We apply the regression results to assess China's current account over the next six years, projecting a large drop in its account/GDP surpluses.
- Notes:
- Print version record
- October 2008.
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