With US trade and current account deficits approaching 6% of GDP, some have argued that the country is "on the comfortable path to ruin" and that the required "adjustment'' may be painful. We suggest instead that things are fine: although national saving is low, the ratios of household and...

With US trade and current account deficits approaching 6% of GDP, some have argued that the country is "on the comfortable path to ruin" and that the required "adjustment'' may be painful. We suggest instead that things are fine: although national saving is low, the ratios of household and...

Net exports and current account balances among developed countries,which contributed to the so called “global imbalances”, arehighly persistent. Despite success along many dimensions, internationalbusiness cycle models have difficulty replicating these salient,low-frequency features of...

Net exports and current account balances among developed countries, which contributed to the so called “global imbalances”, are highly persistent. Despite success along many dimensions, international business cycle models have difficulty replicating these salient, low-frequency features of...

Net exports and current account balances among developed countries,which contributed to the so called “global imbalances”, arehighly persistent. Despite success along many dimensions, internationalbusiness cycle models have difficulty replicating these salient,low-frequency features of...

We consider the causes of international capital flows. Since capital flows are extremely persistent, we argue that their drivers must be persistent, too. We think the most compelling candidates are demographic trends, tfp differences and financial frictions. In this paper we focus primarily on...