It's business models, stupid!

Matthias Diermeier, Michael Hüther and Markos Jung

No 33/2018, IW-Kurzberichte from Institut der deutschen Wirtschaft (IW) / German Economic Institute

Abstract: In contrast to a massive current account deficit against China, the US runs a current account surplus with respect to the European Union. The US-EU surplus is largely driven by a positive service balance and primary incomes originating from US investments abroad. Services and primary incomes overcompensate the US goods trade deficit with the EU. Rather than representing a 'rip-off', the different balances reflect the economies' different business models.

Date: 2018
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Persistent link: https://EconPapers.repec.org/RePEc:zbw:iwkkur:332018

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