publication . Preprint . 2006

"Can Global Imbalances Continue?: Policies for the U.S. Economy"

Dimitri B. Papadimitriou; Gennaro Zezza; Greg Hannsgen;
Open Access
  • Published: 01 Nov 2006
In this new Strategic Analysis, we review what we believe is the most important economic policy issue facing policymakers in the United States and abroad: the prospect of a growth recession in the United States, linked to the imbalances in the U.S. current account, government, and private sector deficits. The current account balance, which is a negative addition to U.S. aggregate demand, is now likely to be above 6.5 percent of GDP and has been rising steadily for some time. The government balance has improved, again giving no stimulus to demand, which has therefore relied entirely on a large and growing private sector deficit. A rapidly cooling housing market i...
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