This pact would monitor current account imbalances and penalize excessive deficits or surpluses in the external account.

It then cites global current account imbalances, particularly the US external deficit, describing it as unprecedented for a reserve currency country to have a current account deficit of such magnitude.

It then cites global current account imbalances, particularly the US external deficit, describing it as unprecedented for a reserve currency country to have a current account deficit of such magnitude.

Rebalancing also involves a global demand switch from external deficit countries to those running large current account surpluses.

A vicious circle of public finance deficits, current account gaps, worsening external debt dynamics, and stagnating growth can then set in.

Demand adjustments in large current account imbalances?

Clearly, America's current account deficit is unsustainable.

Even the current account showed a deficit in January.

Monitoring external balances can be an effective tool to measure future default risks, since sustained current account deficits lead to a growth in net foreign debt.

China's current account surplus and export growth have, indeed, fallen.

The renminbi s exchange rate, then, is really a secondary factor in China s external account.

Quantitative easing in the US cannot have been behind these large swings in global current account balances, because America s external deficit has not changed significantly in recent years.

The US current account deficit and the Asian surplus will shrink.

But do current account constraints apply to major, financially stable countries?

Other macroeconomic policies of all kinds influence the current account balance.

Monitoring external balances can be an effective tool to measure future default risks, since sustained current account deficits lead to a growth in net foreign debt. Moreover, there is a direct relationship between the EMU countries private sector debt dynamics and their current account imbalances within the euro zone.

Many emerging markets have run current account surpluses for the first time.

So, how will the European Union distinguish between good current account deficits a government creates a favorable business climate, generating inflows of foreign direct investment and bad current account deficits?

Why can t the US current account deficit remain at its 2006 value indefinitely?

The current account deficit has been almost eliminated, and the banking crisis contained.

Similarly, Russia s current account balance has been mostly in surplus in recent years.

SINGAPORE These days everyone seems to want to run a current account surplus.

The current account deficit has been almost eliminated, and the banking crisis contained.

Countries that ran significant current account surpluses, built up large reserves, and fixed (or heavily managed) their exchange rates in order to support the first two objectives appeared to secure external stability.

So, how will the European Union distinguish between good current account deficits a government creates a favorable business climate, generating inflows of foreign direct investment 160 and bad current account deficits?

In a global economy with deficient aggregate demand, current account surpluses are a problem.

As the national saving rate has come down, so has the current account surplus.

Given China s massive current account surplus (12 of GDP), the renminbi is still undervalued.

So there is an upside to today s massive US fiscal and current account deficits.

On top of this is the almost certain unwinding of global current account imbalances.

A country with current account and capital account surpluses and increasing foreign exchange reserves normally sees an excessive money supply and high inflation.

There is a third reason why estimates of long run equilibrium with current account balance may be of little predictive value. Do Europe and Japan really want to see the US achieve an external balance?

The counterargument hinges on the difference between the current account deficit and the trade deficit.

But a chronic current account deficit is unsound, unfair, and unsustainable in the long run.

The US current account deficit has been the most widely discussed indicator of global imbalances.

That could bring its current account into balance or even into slight deficit by 2015.

Yet the quarterly US current account deficit actually increased from 195 billion to 205 billion.

An economy s current account is the difference between its investment rate and its savings rate.

Doesn t the country s persistent current account deficit reflect excessive consumption, rather than weak effective demand?

Thus, in order to keep the current account deficit stable, the trade deficit must shrink.

The US alone ran a current account deficit of 739 billion (5.3 of its GDP).

A country that has a balanced current account does not need any additional foreign capital.

Global macroeconomic stability requires that we avoid such large current account imbalances in the future.

If foreign debt matters more than public debt, the key variable requiring adjustment is the external deficit, not the fiscal deficit. A country that has a balanced current account does not need any additional foreign capital.

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