9 posts on "Current Account"
October 17, 2022
What Is the Outlook for China’s External Surplus?
The sharp slowdown in China’s property sector has reignited debate over the country’s future role as a net provider of savings to the global economy. The debate revolves around whether a sustained decline in property investment will spur a long-term increase in China’s current account surplus, given the country’s high savings rate. However, China’s rapidly aging population presents opposing forces that complicate this story. The shift of a large share of its population from working life to retirement will reduce savings supply even as a shrinking labor force will reduce investment demand. In this post, we focus on the demographic part of the story and find that this force will exert considerable downward pressure on China’s current account surplus in coming years.
January 3, 2022
When Will U.S. Exports Take Off?
The economic recovery from the COVID-19 pandemic has been uneven across countries and sectors. While U.S. imports have rebounded to surpass their level before the collapse in 2020, U.S. exports remain far below their pre-pandemic level. This asymmetry in part reflects the different sectoral compositions of imports and exports. U.S. imports are driven by goods trade, while exports rely more heavily on services trade. A key component of services exports is foreign travel to the United States, which has dried up due to the suspension of nonessential travel imposed in March 2020. However, U.S. exports may now be at a turning point given the reopening of U.S. borders to all vaccinated travelers on November 8. We analyze the trajectory of U.S. services and how the lifting of the travel ban might contribute to the rebound of U.S. services exports.
Posted at 7:00 am in Current Account, Exports, International Economics, Macroeconomics, Pandemic | Permalink
August 7, 2019
Does a Data Quirk Inflate China’s Travel Services Deficit?
China international trade service balance of payments imports exports tourism current account balance
Posted at 7:00 am in Balance of Payments, Current Account, Exports, International Economics | Permalink
May 30, 2018
Good News, Leverage, and Sudden Stops
One of the major debates in open economy macroeconomics is the extent to which capital inflows are beneficial for growth. In principle, these flows allow countries to increase their consumption and investment spending beyond their income by enabling them to tap into foreign saving. Periods of such borrowing, however, are associated with large trade deficits, external debt accumulation, and, in some cases, overheating when these economies operate beyond their potential output level for an extended period of time. The relevant question in this context is whether the rate at which a country is taking on external debt has useful predictive information about financial crises.
Posted at 7:00 am in Crisis, Current Account, Expectations, Exports, Household, International Economics, Macroeconomics | Permalink
May 9, 2016
The Turnaround in Private and Public Financial Outflows from China
China lends to the rest of the world because it saves much more than it needs to fund its high level of physical investment spending.
Posted at 7:00 am in Balance of Payments, Central Bank, Current Account, Exchange Rates, Exports, Financial Markets, International Economics | Permalink
June 24, 2015
Falling Oil Prices and Global Saving
The rise in oil prices from near $30 per barrel in 2000 to around $110 per barrel in mid-2014 was a dramatic reallocation of global income to oil producers.
Posted at 7:00 am in Current Account, Euro Area, Exports, Financial Markets, International Economics | Permalink | Comments (1)
August 20, 2014
The Declining U.S. Reliance on Foreign Investors
The United States has been borrowing from the rest of the world since the mid-1980s.
November 4, 2013
Japan’s Missing Wall of Money
The Bank of Japan announced an open-ended asset purchase program in January 2013 and an unexpectedly ramped-up version of the program was implemented in early April.
Posted at 7:00 am in Balance of Payments, Current Account, Exchange Rates, Exports, International Economics | Permalink | Comments (1)
May 22, 2013
Foreign Borrowing in the Euro Area Periphery: The End Is Near
Current account deficits in euro area periphery countries have now largely disappeared.
Posted at 7:00 am in Balance of Payments, Current Account, Euro Area, Exchange Rates, Exports, International Economics | Permalink | Comments (1)
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