Is There a “Global Saving Glut”? And Is It the Cause of the US Current Account Deficit?. Menzie D.Chinn University of Wisconsin and NBER. Presentation at NABE Panel “International Capital Flows” ASSA, Chicago, January 6, 2007. Anticipating the Answers. Maybe (better investment drought)
University of Wisconsin and NBER
Presentation at NABE Panel
“International Capital Flows”
ASSA, Chicago, January 6, 2007
Note: 10 yr const. mat adjusted by Livingstone, Blue Chip, SPF 10 year expected infl.
Source: St. Louis Fed, Philadelphia Fed
Source: BIS, St. Louis Fed
Source: M.Chinn & H. Ito, “Assaying the World Saving Glut”,http://www.ssc.wisc.edu/~mchinn/CA_Chinn_Ito.pdf
Between 2000 and 2005, there was approximately a 4.3 percentage point swing in the US Federal budget balance, and a 2.2 percentage point swing in the U.S. current account balance. This outcome is consistent with a 0.5 coefficient.
CA1EAsia > 0
CA1US < 0How Can Low Rates and Imbalances Be Reconciled?