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Mapping The Markets by Robin Griffiths, Deborah Owen

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9 Global imbalances

US current-account deficit

There are a number of major imbalances in the global economy. The one that provokes most comment is the US current-account deficit. As Figure 9.1 shows, apart from a brief blip in 1991, the US current account has been in deficit since the early 1980s, and over the past decade there has been a marked deterioration in the trend.

Normally, when a country runs a current-account balance the currency comes under pressure and real interest rates rise, tilting the balance of growth away from the domestic economy and towards the export sector. But the United States has managed to defy the normal ...

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