From: Alejandro Valle Baeza (valle@SERVIDOR.UNAM.MX)
Date: Mon May 15 2006 - 14:46:13 EDT
"Since 1970 the U.S. has been the only large industrial country that has run current account deficits in excess of 5%. This reflects the unique position that the U.S. has in the international financial system, where its assets have been in high demand, allowing it to run high and persistent deficits. On the other hand, this fact also suggests that the U.S. is moving into uncharted waters. As Obstfeld and Rogoff (2004, 2005), among others, have pointed out, if the deficit continues at its current level, in twenty five years the U.S. net international liabilities will surpass the levels observed by any country in modern times. During the last 30 years only small industrial countries have had current account deficits in excess of 5% of GDP: Australia, Austria, Denmark, Finland, Greece, Iceland, Ireland, Malta, New Zealand, Norway and Portugal. What is even more striking is that very few countries - either industrial or emerging -- have had persistently high current account deficits for more than five years (Edwards 2005b)." Quoted from: NBER WORKING PAPER SERIES THE U.S. CURRENT ACCOUNT DEFICIT: GRADUAL CORRECTION OR ABRUPT ADJUSTMENT? Sebastian Edwards Working Paper 12154 http://www.nber.org/papers/w12154 However, Mr. Edwards say: " I estimate that the predicted probability of a current account reversal in the U.S. has increased from 1.7% in 1999, to 14.9% in 2006." Wishful thinking or scientific prediction? Alejandro Valle Baeza -- Posgrado Facultad de Economía Av. Universidad 3000 Circuito interior México 04510, DF México Tel. 55-56222148 fax 55-56222158 Página web: http://usuarios.lycos.es/vallebaeza
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