The U.S. saving deficiency, current-account deficits, and deindustrialization: Implications for China

Ronald McKinnon

Journal of Policy Modeling, 2013, vol. 35, issue 3, 449-458

Abstract: In the United States, both private and governmental saving dropped sharply after 1980 in contrast to the preceding postwar decades. But investment in the America economy has held up quite well (except for the 2008 banking crisis) because of heavy borrowing from foreigners as manifested in the trade deficit. But what is cause and what is effect? The problem is that the Federal government faces an ultra soft borrowing constraint because of the dollar's central role in the international monetary system. Since 2002, Emerging Markets on the dollar standard's periphery have voluntarily bought—or being forced by hot money flows to buy—more than $6 trillion of foreign exchange reserves.

Keywords: Dollar standard; Hot money flows; Exchange reserves; Trade deficits (search for similar items in EconPapers)
Date: 2013
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (2)

Downloads: (external link)
http://www.sciencedirect.com/science/article/pii/S0161893813000410
Full text for ScienceDirect subscribers only

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:eee:jpolmo:v:35:y:2013:i:3:p:449-458

DOI: 10.1016/j.jpolmod.2013.03.008

Access Statistics for this article

Journal of Policy Modeling is currently edited by A. M. Costa

More articles in Journal of Policy Modeling from Elsevier
Bibliographic data for series maintained by Catherine Liu ().