| Abstract: |
This thesis introduces a simple analytic framework in which the U.S. current account deficit can be discussed, demonstrates how the US external imbalances have built up during the past decade and sets them into historical context as well as into the context of the contemporary world economy. The paper discusses the financing of the deficit and its ramifications and lays out arguments for and against the claim that the deficit is sustainable. Finally, possible ways of reducing the US external imbalances are outlined. The thesis concludes that the U.S. current account deficit is not sustainable in the long run. |
