Conference Paper

Comments on \\"Understanding global imbalances\\" by Richard Cooper

Abstract: In short, Cooper tells us not to worry about our current account or its underlying causes. I have a much darker and, I believe, more accurate view of our current account deficit. While I agree with much of what Cooper says, I disagree most strongly with his central thesis that the current account portends no major problem. To the contrary, the current account is symptomatic of a longterm generational policy that has been slowly, but surely driving our nation broke. When the last straw hits the camel?s back, which could happen any day now, we?re going to see the bond and stock markets crash, interest rates soar, the dollar plunge, and inflation take off notwithstanding the Fed?s supposed independence.

Keywords: Saving and investment; International trade; Pensions; Retirement income; Balance of trade;

Bibliographic Information

Provider: Federal Reserve Bank of Boston

Part of Series: Conference Series ; [Proceedings]

Publication Date: 2006

Volume: 51