Journal Article
Financial globalization and the U.S. current account deficit
Abstract: Despite heavy borrowing in recent years, the United States has financed its large current account deficits without experiencing an unusual buildup in foreign investors' holdings of U.S. assets. A new analysis suggests that this somewhat surprising development is attributable largely to rapid financial globalization, with cross-border flows worldwide rising as fast as flows into the United States. However, it could be harder for the country to sustain large deficits on favorable terms if the current wave of globalization subsided or the rate at which U.S. investors buy foreign assets increased.
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Bibliographic Information
Provider: Federal Reserve Bank of New York
Part of Series: Current Issues in Economics and Finance
Publication Date: 2007
Volume: 13
Issue: Dec
Order Number: 11